That's how banks make money too. However, banks must also consider the risk of their debtors defaulting on their loans. They pass those risks on to you in the form of very low interests rates on money deposited, while keeping your deposit "safe". It seems like BlockFi was passing the risk on in the form of an undisclosed risk of losing all your money. That's the part the SEC seems to have a problem with:

> The order also finds that BlockFi made a false and misleading statement for more than two years on its website concerning the level of risk in its loan portfolio and lending activity.

The point is there's no free lunch. If you're making 9+% on your deposit don't be surprised if your account is wiped out when BlockFi's debtors fail to pay.