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New Jersey AG Orders Cease-and-Desist to BlockFi

New Jersey AG Orders Cease-and-Desist to BlockFi
  • Attorney General of New Jersey has ordered BlockFi a cease-and-desist.
  • The order requests them to stop accepting BlockFi Interest Account (BIA) clients.
  • BlockFi CEO shares they remain fully operational for their existing clients.

On a late Monday evening, the Attorney General (AG) of New Jersey has ordered BlockFi a cease-and-desist. According to BlockFi CEO Zac Prince, the order requests them to stop accepting BlockFi Interest Account (BIA) clients residing in New Jersey. 

With that said, Zac Prince shared their official statement in a Twitter thread on Monday night.

“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 to stop accepting new BIA clients residing in New Jersey beginning July 22, 2021.”   

Of note, BlockFi is a New Jersey-based multi-billion dollar crypto platform. It is one of the more prominent companies in the crypto industry. The company lets people borrow cash, and trade crypto. It is known for offering up to 7.5% APY to those who are willing to lend out their crypto.

Since its inception in 2017, BlockFi has raised $500 million on its private funding and has a current valuation of over $5 billion.

Currently, BlockFi is engaged in an ongoing dialogue with regulators to help them understand their products. Whereas the CEO also shared in his tweet, they believe their products are lawful and appropriate for crypto market participants.

Therefore, the whole BlockFi disagrees with the action of the New Jersey Bureau of Securities. Meanwhile, Forbes was first to report on this cease-and-desist after obtaining a draft press release from the AG’s office.

In this draft, Attorney General Andrew J. Bruck shared a comment saying,

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.

Given that the federal regulators have declared Bitcoin and Ethereum are not securities, New Jersey may have targeted the company regarding its loan products. Since these loans are related to crypto projects like Chainlink and Uniswap.

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