It's not just about misleading claims, but also that BlockFi broke regulations by doing "unregistered offers and sales of the lending product" and "operated for more than 18 months as an unregistered investment company".
In other words, BlockFi failed to do the bare minimum to run a financial investment service, and are now getting punished for it. That doesn't sound like a overreach to me.
And yeah, in general, laws are usually interpreted subjectively, as laws usually give some wiggle-room to make sure it covers enough ground without having to write 1000 pages about every single edge-case.
If you follow crypto regulatory clarity with even the smallest curiosity you'll find these crypto companies are _begging_ the SEC and IRS to be more clear so they can comply to existing laws.
This hugely successful company wants to exist legally and understand the laws that apply to them. This much has been obvious for a long time now.
> The SEC simply wants to expand their regulatory power outside of what they are permitted to do and is flexing on a big player for the media attention.
No, they are not. The SEC's goal is to protect consumers and the general public, and like most other regulatory agencies, have been doing a good job at it.
I feel like there is a growing distrust in the government (at least in the US) and this is not a good thing. If you don't like what the SEC is doing, get involved in a democractic way (voting, organizing, etc.) and change it.
What sort of "intellectual DDoS" is this -- reeks of disingenuity.
Page 9 of the PDF of the actual order (linked on the page under "SEC Order") explains how BlockFi made misleading claims:
> From March 2019 through August 2021, BlockFi misrepresented on its website that its institutional loans were “typically” over-collateralized, when in fact, most
institutional loans were not. Accordingly, although BlockFi made other disclosures on its website concerning its risk management practices, BIA investors did not have complete and accurate information with which to evaluate the risk that, in the event of defaults by BlockFi’s institutional borrowers, BlockFi would be unable to comply with its obligation to pay BIA investors the stated interest rates or return the loaned crypto assets to investors upon demand. This false and misleading statement was in the offer and sale of BIAs, and as such was in the offer and sale of securities.
