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Texas Joins List Of States To Target BlockFi’s BTC Savings Accounts

Texas joins list of states to target the BlockFi BTC savings account after New Jersey and Alabama alleging securities laws violations as we can see more in today’s Bitcoin news today. Texas is the latest state that looks to crack down on the crypto lending platform BlockFi according to a notice published today by the […]

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Texas Joins List Of States To Target BlockFi’s BTC Savings Accounts

Texas joins list of states to target the BlockFi BTC savings account after New Jersey and Alabama alleging securities laws violations as we can see more in today’s Bitcoin news today.
Texas is the latest state that looks to crack down on the crypto lending platform BlockFi according to a notice published today by the Texas State Securities Board. The regulators filed for a cease-and-desist order against BlockFi and two of its subsidiaries BlockFi Lending and Trading over the alleged sale of unregistered securities. Texas joins the list of states that are already targeting BlockFi due to the investment product called BlockFi Interest Account which promises high returns in exchange for the banked cryptocurrency like BTC.

[1/1]We are aware of the show cause order issued by the Alabama Securities Commission. We have active dialogues with regulators worldwide, including those in Alabama, to share details about our products, which we believe are lawful and appropriate for crypto market participants.
— BlockFi (@BlockFi) July 21, 2021

New Jersey was the first state to go after the company for alleged dealings in unregistered securities and filed a cease-and-desist order earlier this week. Alameda regulators hit the company with a show-cause notice asking the company to defend itself against the potential cease-and-desist order. The company wrote that the “blockFi Interest Account is not a security.” A judge at the state Office of Administrative HEadings will decide in a few months whether BlockFi can operate in Texas anymore.
As recently reported, In the latest blow of one of the biggest names in the industry, the New Jersey AG Accused BlockFi of violating the securities laws. However, the alleged securities law violations are still unclear. The attorney general of New Jersey issued a cease and desist order for BlockFi to stop accepting new customers as the CEO Zac Prince tweeted. The news is a huge blow to the company which is one of the most prominent companies in the crypto space, known for offering yields up to 8% to those that are willing to lend crypto. Prince said that the company will be able to continue to serve existing customers in other jurisdictions.

It remains to be seen whether the entire operation of the platform was a  violation of securities laws or whether it jas issues with certain transactions given that federal regulators declared BTC and ETH not securities, the state could have targeted the company over the loan products that were tied to assets like Uniswap and Chainlink. In any case, the company is in serious trouble with regulators and the question remains whether the federal regulators especially in New York will take legal action against the company.