It's not just about misleading claims, but also that BlockFi broke regulations by doing "unregistered offers and sales of the lending product" and "operated for

It's not just about misleading claims, but also that BlockFi broke regulations by doing "unregistered offers and sales of the lending product" and "operated for more than 18 months as an unregistered investment company". In other words, BlockFi failed to do the bare minimum to run a financial investment service, and are now getting punished for it. That doesn't sound like a overreach to me. And yeah, in general, laws are usually interpreted subjectively, as laws usually give some wiggle-room to make sure it covers enough ground without having to write 1000 pages about every single edge-case.