Ten blockchain companies that were sanctioned by the SEC for fraud and offering non-registered securities received COVID-19 aid from the US Paycheck Protection Program (PPP), according to publicly available data from the Small Business Administration. According to the SBA, the PPP, created by the US Congress and signed into law by the President, is intended to “help businesses keep their workforce employed during the ongoing pandemic” and provide loans to eligible businesses to prevent job losses.
The government handout is for companies to help retain their staff.
The ongoing global pandemic has caused the economy across countries to slow down as people in many parts of the world are ordered to stay home. The Government Accountability Office, a government watchdog, issued a report last month that raised alarms about the PPP’s vulnerability to fraud and “improper payments.” The federal government may forgive these loans if employers use the majority of funds to pay payroll expenses or property-related operational expenses. The government bailout money would help businesses retain their staff amid slow operations. Some of the companies that received PPP loans operate offshore.
More than 75 blockchain companies received bailout money.
The loan-level data for the PPP recently published by the Small Business Administration revealed that over 75 blockchain companies in the country received aid under the Paycheck Protection Program to prevent mass layoffs. The majority of these companies received small loans because of their small teams, with the entire industry getting at least $42 million in forgivable loans under the PPP handouts. However, the decentralized economy still depends on centralized finance and government assistance.
The data revealed by the SBA does not state the exact loan amounts received by these companies. Instead, blockchain companies are divided into five brackets depending upon several factors. The average payroll calculation caps each employee’s annual salary at $100,000, and only companies with more employees are eligible for larger loans rather than ones with well-compensated employees.