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BlockFi wins money services license in Iowa BlockFi wins money services license in Iowa

BlockFi wins money services license in Iowa

The money services license will enable BlockFi to offer Iowa residents stablecoin trading services and instant fund transfers.

BlockFi wins money services license in Iowa

Cover art/illustration via CryptoSlate

BlockFi, a New Jersey-based crypto lending platform, has received a money services license in Iowa, the company announced June 28.

Prior to securing this license, BlockFi faced a $943,000 fine from the Iowa Insurance Division. This fine was part of a larger penalty, which saw BlockFi agree to pay $100 million to settle with the U.S. Securities and Exchange Commission and the securities regulators of 53 states after offering and selling securities without registering as a broker-dealer or agent.

Are cracks beginning to form?

Despite having to part with $100 million amid a bear market that has seen companies like Celsius, Voyager, and Three Arrows Capital (3AC) face liquidity problems, BlockFi is operating normally, according to its CEO Zac Prince.

Nonetheless, Prince recently announced that BlockFi had secured a $250 million revolving credit facility from leading crypto exchange FTX. According to him, BlockFi planned to use these funds to strengthen its balance sheet.

Soon afterward, a WSJ report disclosed that FTX is in talks to acquire a stake in BlockFi. However, the companies did not reach an agreement.

Commenting on this news, a BlockFi spokesperson said,

BlockFi does not comment on market rumors. We are still negotiating the terms of the deal and cannot share more information at this time. We anticipate sharing more on the terms of the deal with the public at a later date.

Meanwhile, Morgan Creek Digital is trying to raise $250 million to purchase a majority stake in BlockFi, CoinDesk reported on June 26, citing a leaked investor call. Through these efforts, the company seeks to prevent losing its investment in the crypto lending platform.

Reportedly, Mark Yusko, Morgan Creek Digitalโ€™s Managing Partner, believes the FTX offer might topple BlockFiโ€™s current shareholders. According to him, the term sheet offers FTX an option to buy BlockFi โ€œat essentially zero priceโ€; if FTX were to use this option, it would wipe out all BlockFi stakeholders.

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