Blockfi was Ordered to Stop Offering Interest-bearing Crypto Accounts in New Jersey
ON July 19th, 2021, Zac Prince CEO of the crypto-financial services firm Blockfi told the public about what the New Jersey Bureau of Securities has told the company Read the phrase below:
“stop accepting new BIA clients residing in New Jersey beginning July 22, 2021.”
“we’ve been closely monitoring activity involving cryptocurrencies for compliance.” Tweet by “Andrew Bruck” the New Jersey’s acting attorney general.
On Monday, the Forbes staff writer Michael del Castillo discovered an unpublished draft of a cease and desist order and was sent to a company that provides users with interest-bearing crypto accounts and crypto debit cards after the New Jersey Bureau of Securities confirmed it was real.
“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,” Zac Prince tweeted the same day *saying*. “We remain fully operational for our existing clients in New Jersey. All aspects of the Blockfi platform continue to be accessible to our clients in New Jersey. The order calls for Blockfi is to stop accepting new BIA clients residing in New Jersey beginning July 22, 2021,” Prince added.
The next day, New Jersey’s acting attorney general Andrew Bruck also tweeted about the situation and shared a press release stemming from the Garden State’s financial authorities. “We’ve been closely monitoring activity involving cryptocurrencies for compliance with NJ’s investor protection laws. Our Bureau of Securities ordered an NJ-based company – Blockfi – to stop offering interest-bearing accounts,” Bruck said on Tuesday.
A number of cryptocurrency supporters were displeased by the state of New Jersey’s actions and responded to Bruck’s tweet. “None of the cryptos offered on Blockfi represent ownership in a company or anything else,” one individual remarked. “They are just commodities. This makes absolutely 0 sense to the point that it’s laughable. Did the NJBoS do its homework before doing this or does it just not like cryptocurrency?”
The New Jersey attorney general’s office published a press release which explains that the entity is stepping up to “protect investors” as new financial service business models come under scrutiny. the acting attorney general Bruck said.
“Our rules are simple: if you sell securities in New Jersey, you need to comply with New Jersey’s securities laws, No one gets a free pass simply because they’re operating in the fast-evolving cryptocurrency market. Our Bureau of Securities will be monitoring this issue closely as we work to protect investors.”
Cryptocurrency investment products offered and sold on decentralized finance platforms carry significant risks, even beyond those associated with the volatility of cryptocurrency,” Kaitlin Caruso, acting director of the New Jersey Division of Consumer Affairs stressed. “Platforms like Blockfi may mirror the traditional financial structures that we know and trust, but in reality, they can leave investors extremely vulnerable.”
