BlockFi ordered to stop issuing new accounts in New Jersey
Decentralized trading and lending cryptocurrency platform, BlockFi, has received an order from the New Jersey Bureau of Security to stop accepting new local customers from July 22nd.
The CEO of BlockFi Zac Prince confirmed in a tweet that his company received a Cease and Desist order from New Jersey’s Attorney General’s Office late Monday. However, he reassured existing customers that the company will still be fully operational.
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. (thread)
— Zac Prince (@BlockFiZac) July 20, 2021
According to a Forbes report, the undated draft accuses BlockFi of funding its crypto-based operations partly through the sales of unregistered securities, a move that is in alleged violations of existing securities laws.
Meanwhile, Acting Attorney General Andrew Buck, who just assumed office on Monday, appears to be making his intentions clear about his new role. He reportedly stated in the draft that:
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.
Several regulators have moved to clamp down on crypto businesses. For instance, leading crypto exchange Binance has made the headlines many times in the past month amid increasing regulatory scrutiny.
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