Several states’ securities regulators have been furrowing their brows with regards to BlockFi Interest Accounts (BIA) lately. This includes BlockFi’s home state of New Jersey, who was arguably one of the more strict in their action towards the firm; New Jersey issued a cease and desist that instructed the firm to stop offering their BIA product before the end of this week. Now, securities regulators in New Jersey have pumped the brakes for a moment, extending that deadline. However, in the meantime, Vermont has joined the ranks of New Jersey, Texas, and Alabama for issuing regulatory concerns around BlockFi’s BIA product.
New Jersey Extends Deadline
New Jersey’s state attorney general issued a cease and desist on July 19, ordering the firm to stop accepting new BIA accounts by July 22. That deadline was seemingly extended to July 28, and now has been extended once more to September 2. This will give the company over a month to sort through what appears to be very substantial regulatory hurdles. The news came as part of a company announcement on BlockFi’s website from CEO Zac Prince.
Prince also elaborated that New Jersey’s actions would not impact current BIA customers in the state, or other BlockFi products, and that the order only calls for preventing the creation of new BIAs. “Your access to BlockFi is completely unimpaired,” said Prince, adding that he saw these regulatory calls as “an opportunity for BlockFi to help define the regulatory environment for our ecosystem.”
As the broader crypto and DeFi landscape continues to grow, so too will regulatory eyeballs. | Source: CRYPTOCAP:TOTAL DEFI on TradingView.com
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Vermont Adds Their Name To The List
While another calendar month is likely a nice sigh of relief for BlockFi’s domestic team stateside, they’ll have their hands still full with Vermont joining the ranks of the aforementioned list of states targeting the BIA product.
The Vermont Department of Financial Regulation has given the company 30 days to show the department commissioner evidence as part of a ‘Show Cause Order’. Alabama also issued the firm a Show Cause Order with a similar 30 day command. Additionally, like the three other states pulling out the regulatory microscope, Vermont is also calling out the BIA product as the main point of contention.
Through the flurry of headlines for the company in recent weeks, BlockFi has maintained it’s stance that it’s BIAs are not securities and that the firm is in active, ongoing conversations with regulators. The crypto grey area is likely to continue to cause emerging companies headaches, as regulators sort through what are and what aren’t securities.
Regardless of how the situation shakes out in each state, it’s likely going to be a busy few months for BlockFi ahead.
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by Taylor Scott on July 29, 2021 at 09:36AM
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