Linus Financial, a crypto services firm based in Nashville, has reached a settlement with the U.S. Securities and Exchange Commission (SEC) over allegations of failing to register its retail crypto lending product.
The SEC revealed the settlement, which centered on Linus’s crypto lending product called Linus Interest Accounts. The agency opted not to impose civil penalties due to Linus Financial’s cooperation and swift corrective actions.
According to an SEC order, Linus Financial began offering its interest-bearing accounts in March 2020, allowing U.S. investors to deposit fiat currency in exchange for the company’s commitment to pay interest.
The Importance of Compliance: Linus Financial’s SEC Settlement
The SEC determined that the Linus Interest Accounts were offered and sold as securities and did not qualify for an exemption from SEC registration, making it necessary for Linus Financial to register these offerings and sales.
Stacy Bogert, Associate Director of the SEC’s Division of Enforcement, emphasized the agency’s commitment to holding companies accountable while encouraging cooperation and prompt corrective actions. The settlement sends a clear message to other market participants about the importance of cooperation and remediation.
In a related development on the same day, the Commodity Futures Trading Commission (CFTC) issued a strong warning to operators of decentralized finance (DeFi) protocols. The CFTC announced that it had filed and settled charges against Opyn, ZeroEx, and Deridex platforms.
These actions underscore the heightened regulatory scrutiny facing the crypto and DeFi sectors, highlighting the importance of compliance and cooperation with regulatory authorities.