Iowa’s Insurance Division has ordered BlockFi to pay a $943,396.22 fine as part of a larger settlement with securities authorities throughout the country.

BlockFi fined more than $900K by Iowa

According to the Iowa consent order, the crypto lending firm allegedly misrepresented the risk in its loan portfolio and sold unregistered securities. BlockFi responds by claiming that its product is not a security and believes that the settlements would open the way for its products to be registered.

Iowa’s consent order is part of a multi-state investigation involving the Securities and Exchange Commission and state securities authorities from 53 states. BlockFi will pay $50 million in fines to the 53 countries and $50 million to the SEC as part of a $100 million settlement with the SEC.

Regulatory scrutiny

Securities authorities on the federal and state levels have been looking into BlockFi’s products. The company’s interest account product functions as a savings account that pays greater interest rates than standard high-yield savings accounts. It achieves this by lending money on its platform, similar to how a bank earns interest.

Due to the current market conditions, the company has cut around 20% of its staff, and there have been rumors that BlockFi is in the process of closing a down-round in which the company will raise funds at a lower valuation than previous raises.