BlockFi Faces Regulatory Pressure In New Jersey

Source: Adobe / Alexander Berdyugin

Regulators seem to want to continue strengthening their oversight of the crypto sector. BlockFi, one of the leading US cryptocurrency lending firms reportedly received a termination and abstinence order from the New Jersey Attorney General (AG).

The attorney general is said to be accusing BlockFi of violating New Jersey’s securities laws. According to Forbes, which claims to have received a copy of the draft press release from AG offices, the acting attorney general Andrew Brooke would declare:

“Our rules are simple. If you sell securities in New Jersey, you must comply with New Jersey securities laws. No one is eligible for a pass just because he works in the securities market. A cryptocurrency that is developing rapidly. Our office will follow this issue carefully to protect investors. “

Zach Prince, founder and CEO of BlockFi, was originally quoted as follows:

“The company is not aware of any pending action by the New Jersey attorney general. We have an excellent relationship with New Jersey state and other state and federal regulators. “

But later, through the official BlockFi Twitter account, the company confirmed that she “received an order from the New Jersey Securities Authority regarding the BlockFi Interest Account (BIA) trading in the state of New Jersey.”

BlockFi added that it “is in ongoing dialogue with regulators to help them understand our products that we believe are legal and appropriate for cryptocurrency market participants.”

However, the company acknowledged that the order requires BlockFi to stop accepting new BIA clients from New Jersey from July 22, 2021.

But, she added,

“The BIA is not a security and therefore we disagree with the statements of the New Jersey Securities Authority. All aspects of the BlockFi platform are still available to our New Jersey clients. We will continue dialogue with all relevant authorities to safeguard interests. our customers and ensure that our products remain affordable. “

Jake cherwinski, legal director Complicated (COMP) urged the crypto community to wait and see exactly what the cease-and-desist order says before drawing any hasty conclusions. letter on Twitter that by then “we don’t know if this is a serious problem for the crypto industry, just a problem with BlockFi, or nothing at all.”

Matthew ballensweig, director and loan officer at Genesis Trading, also called for restraint, indication “In the short term, this action is unlikely to have any major consequences other than greater regulatory uncertainty.”

He added:

“I can’t imagine yet that this will affect the rates of crypto lending. New Jersey savers will simply lend elsewhere. ”

Some have speculated that the controversy surrounding Uniswap (UNI) may have played a role in this situation, as the UNI token has been gaining more attention in recent weeks.


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