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Nashville-based crypto services firm, Linus Financial, has reached an agreement with the U.S. Securities and Exchange Commission (SEC) following allegations of failing to register its retail crypto lending product.

In an announcement made by the SEC, the settlement primarily focused on Linus Financial’s crypto lending product known as “Linus Interest Accounts.” Notably, the SEC chose not to impose civil penalties on the company due to its cooperation and swift corrective actions.

According to the SEC order, Linus Financial initiated the offering and sale of its interest-bearing accounts in March 2020, permitting U.S. investors to provide fiat currency in exchange for Linus Financial’s commitment to pay interest.

The SEC’s statement on Thursday clarified, “The order finds that the Linus Interest Accounts were offered and sold as securities, and that the offers and sales did not qualify for an exemption from SEC registration. Therefore, Linus Financial was required to register its offers and sales of the Linus Interest Accounts.”

Stacy Bogert, Associate Director of the SEC’s Division of Enforcement, stressed the SEC’s commitment to holding companies accountable while also promoting cooperation and swift corrective measures when issues arise. Bogert commented, “Today’s settlement provides a valuable 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 stern warning to operators of decentralized finance (DeFi) protocols. The CFTC announced that it had filed and settled charges against the Opyn, ZeroEx, and Deridex platforms, emphasizing the increased scrutiny surrounding DeFi activities.