Capitol Notebook: Lender fined $1 million by state insurance regulators

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In addition, inflation-related costs are eating up new federal funds for infrastructure projects

Doug Ommen, Iowa Insurance Commissioner

DES MOINES — A loan company has been fined nearly $1 million by state insurance regulators for offering and selling securities that were not authorized for sale in the ‘Iowa and for doing so without being registered as an agent in the state.

Iowa Insurance Commissioner Doug Ommen announced Tuesday that his office issued a consent order against BlockFi Lending LLC, ordered the company to pay an administrative penalty in the amount of $943,396.22 and to cease making any misrepresentation of material facts regarding the securities.

“While innovations, such as cryptocurrencies, can ensure the growth and evolution of the financial system, it is important that regulators ensure that this happens within an appropriate framework that protects investors while facilitating the formation responsible for capital,” Ommen said in a press release.

The order is part of the results of an investigation involving the federal government and 53 jurisdictions, Ommen’s office said. BlockFi will pay settlements of up to $50 million to the 53 jurisdictions and an additional $50 million to federal regulators, according to the press release.

The order claimed that BlockFi had made false statements and omissions about the risk level of its loan portfolio, which did not provide investors with complete and accurate information to assess the risk of the investment, said. Ommen’s office said.

“No matter how knowledgeable or interested investors are in cryptocurrency, investors need accurate information on which to base their decisions,” Ommen said in the press release. “Iowans are encountering new innovations in investing with the advent and increased adoption of cryptocurrencies, however, speculative investments such as these should be treated as such – as speculative Iowans need to make sure they only invest what they are willing to lose.

From 2019 to 2021, assets held in Iowa by BlockFi and its subsidiaries grew from $267,626 to more than $14 million, Ommen’s office said.

TRANSPORT PLAN OK: The Iowa Transportation Commission has approved the proposed $4.2 billion state transportation improvement program for the state’s fiscal years 2023 through 2027.

The program includes investments in highways, public transit, trails, aviation and rail networks in Iowa. Funding comes from a mix of state and federal resources.

The plan includes injecting federal funding through the Infrastructure Bill of 2021, which increased highway-related funding by about 30%, the DOT said. However, a significant portion of this increased funding was allocated to existing projects to offset steep increases in material and fuel costs due to inflation, the DOT said.

The full program can be viewed online at iowadot.gov.

Des Moines Gazette Office

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