{"id":58332,"date":"2023-09-08T02:37:15","date_gmt":"2023-09-08T06:37:15","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/sec-settles-charges-against-linus-financial-over-unregistered-retail-crypto-lending-product\/"},"modified":"2023-09-08T02:37:19","modified_gmt":"2023-09-08T06:37:19","slug":"sec-settles-charges-against-linus-financial-over-unregistered-retail-crypto-lending-product","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=58332","title":{"rendered":"SEC Settles Charges Against Linus Financial Over Unregistered Retail Crypto Lending Product"},"content":{"rendered":"<div>\n<p style=\"text-align:justify;\">The US Securities and Exchange Commission (SEC) announced Thursday that it will settle charges against Tennessee-based fintech firm Linus Financial over sales of an unregistered cryptocurrency lending product.<\/p>\n<p style=\"text-align:justify;\">The regulator declared that it will abstain from imposing civil penalties against Linus Financial due to the firm\u2019s immediate cooperation and prompt remedial actions.<\/p>\n<p style=\"text-align:justify;\">Linus Financial began to offer and sell its crypto lending product \u2013 Linus Interest Accounts \u2013 in the United States around March 2020. The product allegedly allowed investors in the US to bid US dollars in exchange for Linus\u2019 promise to pay interest, the regulator wrote.<\/p>\n<p style=\"text-align:justify;\">\u201cLinus Financial converted investors\u2019 cash into crypto assets, pooled the crypto assets, and controlled how the pooled assets were used to generate income for Linus Financial itself and for investors\u2019 interest payments,\u201d per SEC\u2019s order.<\/p>\n<p style=\"text-align:justify;\">The crypto lending product was sold as securities, which did not qualify for an exemption from SEC registration, it further noted.<\/p>\n<p style=\"text-align:justify;\">However, shortly after the regulator announced charges against a similar crypto product last year, Linus Financial stopped offering its retail crypto lending product and asked investors to withdraw their funds, latest by April 2022.<\/p>\n<p style=\"text-align:justify;\">According to the settlement agreement, Linus Financial agreed to a cease-and-desist order \u201cwithout admitting or denying the SEC\u2019s findings.\u201d<\/p>\n<p style=\"text-align:justify;\">Stacy Bogert, Associate Director of the SEC\u2019s Division of Enforcement said that the regulator has been stringent in holding companies accountable for securities laws violations.<\/p>\n<blockquote>\n<p>\u201cBut we also want to encourage companies to cooperate and take prompt corrective action when problems arise. Today\u2019s settlement provides a valuable message to other market participants about the importance of cooperation and remediation.\u201d<\/p>\n<\/blockquote>\n<h2 style=\"text-align:justify;\">SEC\u2019s Classification of Cryptos as Securities<\/h2>\n<p style=\"text-align:justify;\">The SEC sued two of the world\u2019s largest exchanges \u2013 Binance and Coinbase \u2013 in June, alleging that they were operating as unregistered securities exchanges and offered trading in cryptocurrencies that should have been registered as securities.<\/p>\n<p style=\"text-align:justify;\">The agency has been firm in its contention that most digital assets, except for Bitcoin (BTC) and Ether (ETH), are securities and subject to oversight. The SEC uses the &#8220;Howey Test&#8221; to determine if a digital asset is a security.<\/p>\n<p style=\"text-align:justify;\">The SEC claims have brought significant uncertainty to the crypto industry, leading to delistings, decline in prices and pivoting business models.<\/p>\n<p style=\"text-align:justify;\">However, the recent victory of Ripple against the SEC would possibly galvanize crypto exchanges and firms to resist the agency\u2019s attempt to assert its authority over the industry.<\/p>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/sec-settles-charges-against-linus-financial-over-unregistered-retail-crypto-lending-product.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US Securities and Exchange Commission (SEC) announced Thursday that it will settle charges against Tennessee-based fintech firm Linus Financial over sales of an unregistered cryptocurrency lending product. The regulator declared that it will abstain from imposing civil penalties against Linus Financial due to the firm\u2019s immediate cooperation and prompt remedial actions. Linus Financial began [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":58333,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-58332","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEC Settles Charges Against Linus Financial Over Unregistered Retail Crypto Lending Product | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The US Securities and Exchange Commission (SEC) announced Thursday that it will settle charges against Tennessee-based fintech firm Linus Financial over\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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