A cease and desist order from the New Jersey Bureau of Securities is now preventing crypto lending firm BlockFi from onboarding new interest account clients, Forbes reported on 19 July.
While the publication cited an unpublished draft press release — which accused BlockFi of offering unregistered securities to its BlockFi Interest Account (BIA) clients —Zack Prince, BlockFi’s CEO, confirmed the company had received the order via Twitter on 20 July. The company now has two days to comply with the order, and stop onboarding new BIA clients. Prince tweeted:
Prince further explained BlockFi will remain “fully operational” to its existing New Jersey clients, and they could continue accessing all aspects of the platform. He also stated that BlockFi was “engaged in an ongoing dialogue with regulators to help them understand our products”, and that the company disagrees with the decision that BIA is a security.
It appears that regulators around the world are now taking more notice of the crypto industry, and its unregulated sectors. While BlockFi has received a notice from one state, cryptocurrency exchange Binance has already received several warnings from financial regulators around the world, including the U.K., Italy, Hong Kong, and Lithuania. The exchange is also terminating support for its stock tokens — released only three months ago — after BaFin warned they may be violating E.U. securities rules.