BlockFi receives another extension from NJ regulators on new interest accounts ban
Crypto lender BlockFi has been given another extension by the New Jersey Bureau of Securities (NJ BOS) before enforcing a ban on the creation of new BlockFi Interest Accounts (BIAs). This is the fourth time the ban has been postponed due to ongoing discussions between the two parties.
BlockFi problems with the New Jersey Regulator
In July, the New Jersey Bureau of Securities issued a cease and desist to the crypto company to stop offering these high yields accounts. The order banned BlockFi from selling unregistered securities through its BIAs and accepting new BIAs in the state, which the regulator says violated the state’s securities law.
However, New Jersey was not the only state to crack down on the crypto lender. Although the two states didn’t issue a cease and desist order, Alabama and Texas also alleged that BlockFi was selling unregistered securities to fund crypto lending.
Furthermore, NJ BOS said that BlockFi holds $14.7 billion in assets through its BIA product, although it’s unclear how much New Jersey consumers own.
Although the BlockFi CEO Zac Prince maintained that their Interest Account is not a security, the NJ BOS’s order was to take effect on June 22. However, the ban was extended by a week to July 29, then pushed to Sept 2, and eventually to Sept 30.
Through its Twitter account, the BlockFi has now announced that the regulator has issued another extension to Dec 1.
While BlockFi maintains that its interest-bearing accounts are legal, it will be interesting to see whether the ban will take effect and how this will affect its investors.