- The SEC has resolved its dispute with Linus Financial over Linus Interest Accounts without imposing civil penalties on the company.
- Linus Financial ceased offering accounts defined as securities by the SEC and refunded investors.
- The SEC appreciated the company’s prompt response and cooperation in resolving the issue.
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The SEC has settled its disagreement with Linus Financial over Linus Interest Accounts, opting not to impose civil penalties on the company. Linus Financial halted the provision of accounts classified as securities by the SEC and refunded its investors. The SEC commended the company’s quick response and collaboration in addressing the issue.
SEC and Linus Financial Reach an Agreement
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The SEC began scrutinizing Linus Financial’s Linus Interest Accounts in March 2020. These accounts allowed US investors to convert fiat currency into cryptocurrencies. Despite Linus Financial’s promise to pay interest in return, the SEC classified these accounts as securities and informed the company that it needed to register with the agency.
Following the SEC’s move, Linus Financial ceased offering these accounts to potential investors as of March 25, 2022. The company also initiated a process that allowed existing investors to withdraw their investments by the end of April 2022, providing a full refund guarantee.
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The SEC commended the company’s swift response and remedial measures. The responsibility assumed by Linus Financial was crucial, and Stacy Bogert, Deputy Director of the SEC’s Enforcement Division, emphasized that the federal regulatory body encourages companies to cooperate and resolve issues quickly.
SEC’s Collaborative Tone
In a period where market participants claim that the SEC uses existing laws as a backdoor instead of creating clear regulations, the agency’s approach to Linus Financial stands out.
This development occurred despite heated debates over the SEC Stability Act, which aims to reorganize the agency and possibly remove the current chairman, Gary Gensler. As a result, this case targeting Linus Financial and its resolution provides a fresh perspective on the broader debate about cryptocurrency regulation.
Despite all obstacles, the SEC seems willing to enable a collaborative approach to new financial products in the cryptocurrency market, rather than a punitive one.
In conclusion, the SEC’s decision to resolve its dispute with Linus Financial without imposing civil penalties indicates a shift towards a more collaborative approach to cryptocurrency regulation. This could potentially pave the way for more constructive dialogue and cooperation between regulatory bodies and cryptocurrency companies in the future.