Blockfi ordered no interest-bearing crypto accounts to be provided in New Jersey

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On July 19, CEO of crypto financial services firm Blockfi, Zac Prince, announced to the public that the New Jersey Bureau of Securities had told the company, “As of July 22, 2021, there will be no new BIA residents residing in New Jersey to accept”. Acting New Jersey Attorney General Andrew Bruck also tweeted about the issue, saying, “We have been closely monitoring cryptocurrency-related activities for compliance.”

New Jersey’s Bureau of Securities Takes Action Against Crypto

  • On Monday, Forbes employee Michael del Castillo discovered an unpublished draft injunction order. The order was sent to crypto financial services company Blockfi, a company that provides interest-bearing crypto accounts and crypto debit cards to users. On the same day, Blockfi’s CEO Zac Prince confirmed that the New Jersey Bureau of Securities (NJBoS) cease and desist order was genuine.
  • “Blockfi received an order from the New Jersey Bureau of Securities late Monday night regarding the Blockfi Interest Account (BIA) business in the state of New Jersey,” Prince tweeted Monday. “We remain fully operational for our existing customers in New Jersey. All aspects of the Blockfi platform are still available to our customers in New Jersey. The order requires Blockfi to stop accepting new BIA residents of New Jersey as of July 22, 2021, ”added Prince.
  • The next day, the Acting Attorney General of New Jersey Andrew Bruck also tweeted the situation and shared a press release from the Garden State Treasury. “We have closely monitored cryptocurrency-related activities to comply with NJ’s investor protection laws. Our Bureau of Securities has ordered an NJ-based company – Blockfi – to stop offering interest-bearing accounts, ”Bruck said on Tuesday.
  • A number of supporters of the cryptocurrency were unhappy with the New Jersey state’s actions and responded to Bruck’s tweet. “None of the cryptos offered on Blockfi represent ownership of a company or anything else,” noted one person. “These are just goods. That makes absolutely no sense, to the point that it’s ridiculous. Has the NJBoS done its homework beforehand or does it just not like cryptocurrency? “
  • The news release released by the New Jersey Attorney General said the company is stepping up its “investor protection” policy as it scrutinizes new business models for financial services. “Our rules are simple: If you sell securities in New Jersey, you must comply with New Jersey securities laws,” said Acting Attorney General Bruck. “Nobody gets a free pass just because they are in the rapidly developing cryptocurrency market. Our Bureau of Securities will be closely monitoring this issue as we work to protect investors. “
  • “Cryptocurrency investment products that are offered and sold on decentralized financial platforms involve significant risks that go beyond the risks associated with the volatility of the cryptocurrency,” said Kaitlin Caruso, acting director of the New Jersey Division of Consumer Affairs. “Platforms like Blockfi may reflect the traditional financial structures we know and trust, but in reality they can make investors extremely vulnerable.”

What do you think of New Jersey’s actions against Blockfi? Let us know what you think on this matter in the comments below.

Tags in this story

Andrew Bruck, Blockfi, Blockfi CEO, Blockfi Interest Bearing Accounts, Bureau of Securities, Crypto Accounts, Cryptocurrency, Garden State, Interest-Taring, Kaitlin Caruso, New Jersey, New Jersey Blockfi, investor protection, regulation, securities, New Jersey state, zac prince

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