New Jersey extended the deadline for BlockFi to stop offering crypto lending services and interest-bearing accounts in the state as we can see more in our latest cryptocurrency news today.
BlockFi drew attention from securities regulators in Texas, Alabama, Vermont, and New Jersey as they believe that BlockFi is offering unregistered securities. Crypto lender BlockFi faced plenty of questions from state regulators and not it bought a little bit more time to address some of them. According to BLockFi CEO Zac Prince, the New Jersey Bureau of Securities extended the deadline to stop offering its BlockFi Interest Account until September 2.
The attorney general in the state filed a cease and desist order against the company in July demanding that the BlockFi Interest Account that promises 7.5% annual returns on deposited crypto stops by July 22. the rules are simple, if you sell securities in New Jersey you would have to comply with New Jersey’s securities laws as the AG Andrew J Bruck said at the time. This was the first in a series of actions by state securities regulators against the lender. Now, New Jersey extended the deadline but it is still handed in hand with Texas and Alabama when it comes to the decision. Prince said:
“We’ve said time and again that the key to our industry’s success is appropriate regulation. Ultimately, we see this as an opportunity for BlockFi to help define the regulatory environment for our ecosystem.”
Whereas most of the conversation about crypto regulations relates to whether digital assets are unregistered securities, state securities regulators are preparing to argue that the BIA product is an unregistered security offering or an investment contract that hasn’t been vetted by the US SEC. The Texas State Securities Board explained:
“They are not registered with the Texas State Securities Board to offer or sell securities in Texas, as required by Section 12 of the Securities Act, and the BIAs are not registered or permitted for sale in Texas, as required by Section 7 of the Securities Act. Accordingly, Respondents are violating laws designed to protect Texans.”
BlockFi Interest Account accepts plenty of stablecoins including Tether and Gemini as well as LTC, BTC, and other crypto-assets but Prince vowed to fight for the rights to earn interest on crypto assets.