The New Jersey Bureau of Securities has barred BlockFi from opening new BlockFi Interest Account (BIA) savings accounts for residents of the state. This was disclosed by BlockFi CEO Zac Prince.
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.
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— Zac Prince (@BlockFiZac) July 20, 2021
According to Prince, the order will take effect on July 22, 2021. He did not say why the restrictions were imposed, but noted that existing BlockFi customers would continue to have access to its services.
The CEO stressed that the platform is in ongoing dialogue with regulators, providing guidance on its products. The company does not agree with the Bureau’s actions, arguing that the BIA is not a security and therefore does not fall under the agency’s jurisdiction.
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. BIA is not a security, and we therefore disagree with the action by the New Jersey Bureau of Securities.
— Zac Prince (@BlockFiZac) July 20, 2021
In response to a follower’s question about the safety of user funds, Prince replied that client assets are safe.
Yes.
— Zac Prince (@BlockFiZac) July 20, 2021
On July 20, CryptoQuant analysts recorded the transfer of 100,000 ETH from the Gemini cryptocurrency exchange to BlockFi wallets. The Gemini twins’ company provides custodial services to the lending platform.
100K $ETH moved from Gemini to BlockFi ETH wallet.
View Chart👉https://t.co/i20XMhK9Ox pic.twitter.com/6BnO1EQ9DX
— CryptoQuant.com (@cryptoquant_com) July 20, 2021
Earlier, Forbes obtained a draft press release, according to which the Office of the New Jersey Attorney General, together with the Bureau of Securities, planned to issue a ruling prohibiting BlockFi from opening new BIAs in the region.
The document states that the platform’s activity is at least partly funded through the sale of unregistered securities in violation of applicable laws.
In a Forbes interview, Prince stated that the company has no knowledge of any forthcoming actions by the attorney general. He added that BlockFi maintains “excellent relations” with state regulators.
BlockFi owns more than 35 licenses to conduct money transfers (including in New Jersey) and to provide other financial services. The platform is authorised to issue loans in 17 American states.
In June the SEC accused the crypto startup Loci and its founder John Wise of selling unregistered securities.
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