BlockFi major American crypto leading business served with a cease and desist order by the Attorney General (AG) of New Jersey.
The news was first highlight by Forbes on July 19, with the outlet citing an undated, unpublished draft press release “The New Jersey office of the Attorney General, the Bureau of Securities is planning to issue a Summary Cease and Desist order to BlockFi.”
The draft reportedly accuses BlockFi of offering Unregistered securities to its customers. In a comment provided in the document by Acting Attorney General Andrew J. Bruck.
“Our rules are simple: if you sell securities in New Jersey, you need to comply with New Jersey’s securities laws. No one gets a free pass simply because they’re operating in the fast-evolving cryptocurrency market. Our Bureau of Securities will be monitoring this issue closely as we work to protect investors.”
BlockFi CEO Zac Prince told Forbes, “The company has no knowledge of any impending actions with the New Jersey Attorney General’s office. We maintain great relationships with the New Jersey regulators and other state and federal regulators.”
Prince tweeted, “Late Monday evening BlockFi received an order from the New Jersey Bureau of Securities regarding BlockFi Interest Account (BIA) operations in the State of New Jersey…We remain fully operational for our existing clients in New Jersey.”
He also noted that order calls for BlockFi to stop accepting new BIA clients residing in New Jersey beginning July 22, 2021.
“BlockFi is engaged in an ongoing dialogue with regulators to help them understand our products, which we believe are lawful and appropriate for crypto market participants,” Price said, adding :
“BIA is not a security, and we therefore disagree with the action by the New Jersey Bureau of Securities.”
Unprecedented action is first of its kind against crypto lending platforms, especially one that has gained much steam during a recent bull run. The firm has raised $500 million in private funding and has a valuation of $5 billion. Its interest rates vary between 0.25% and 8.5%, depending on the staked asset and the deposit size.