BlockFi Ordered to Cease Accepting New Jersey Customers

Forum 2 years ago

BlockFi Ordered to Cease Accepting New Jersey Customers

The New Jersey Bureau of Securities has issued a cease and desist order to the crypto lending company BlockFi.

BlockFi, the centralized trading and lending digital asset firm, has received a letter from the New Jersey Bureau of Securities ordering the company to stop accepting new local clients from July 22nd. BlockFi’s CEO, Zac Prince, confirmed the development and said they are working with regulators to “help them understand our products.”

• Citing a draft press release from the New Jersey Office of the Attorney General, Forbes initially broke the news about the Bureau of Securities’ plans to issue a Summary Cease and Desist Order to BlockFi.

• More specifically, the regulator targeted the company’s BlockFi Interest Account (BIA) as it allegedly violated relevant securities laws.

• The crypto company, headquartered in Jersey City, allows customers to lend their digital asset holdings and earn up to 8.5% yearly returns.

• “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.” – Forbes cited Acting Attorney General Andrew Bruck.

• Zac Prince, the CEO of BlockFi, Confirmed receiving such an order from the watchdog. He promised that the firm will remain “fully operational” for its existing clients based in the Garden State.

• However, the order has requested the company to “stop accepting new BIA clients residing in New Jersey beginning July 22nd, 2021.”

• Prince outlined that the company has reached out to the regulator “to help them understand our products, which we believe are lawful and appropriate for crypto market participants.” He added that the BlockFi Interest Account “is not a security, and we, therefore, disagree” with the watchdog’s action.