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The U.S. Securities and Exchange Commission (SEC) has announced a settlement with Linus Financial over the latter’s digital asset interest-bearing accounts, which the agency says violated securities laws.

In its order, the SEC claimed that Linus began to offer the product to U.S. investors in March 2020. Investors would deposit U.S. dollars with the company, which it would convert to USDC, pool together, and either deposit on decentralized liquidity pools or lend directly to institutional borrowers—both generated income, which it used to pay interest to its investors.

Linus offered at least 3.5% APY in interest rates, which was significantly above the rates offered by commercial banks.

Unlike some of its peers, which limited withdrawals, the SEC says Linus allowed investors to withdraw all or part of the assets they deposited with the company at any time.

In 2022, regulators cracked down on digital asset lenders, from BlockFi and Nexo to Voyager Digital and Celsius Network. BlockFi went on to settle with the SEC and other state regulators for $100 million and ceased offering its interest-bearing accounts.

This settlement prompted Linus Financial to start unwinding its services, the SEC says. The company requested that all investors withdraw their funds and cease offering any interest. All investors have been refunded.

These prompt remedial actions and the company’s cooperation led the regulator to decline to pursue civil penalties against the lender.

“The SEC will continue to hold companies accountable for failing to comply with federal securities laws. But we also want to encourage companies to cooperate and take prompt corrective action when problems arise,” commented Stacy Bogert, the Associate Director of the SEC’s Division of Enforcement.

“Today’s settlement provides a valuable message to other market participants about the importance of cooperation and remediation.”

The SEC continues to crack down on rogue digital asset companies, from the major players like Binance and Coinbase (NASDAQ: COIN) to smaller firms like Impact Theory and DEBT Box.

Not everyone is a fan of the SEC clampdown. Some notable figures—including the former White House Director of Communications Antony Scaramucci—are now crying foul and calling for the resignation of chairman Gary Gensler. The latest to join the bandwagon is Coinbase CEO Brian Armstrong, who falsely claimed on Friday that Gensler’s resignation “would certainly help” his company to thrive.

Watch: U.S. Congressman Patrick McHenry on Blockchain Policy Matters

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