Three US States Going After BlockFi In Regulatory Crackdown

New Jersey, Texas, and Alabama have individual state regulators issuing concerns that New Jersey-based DeFi firm, BlockFi, is offering unregistered securities. Regulators seem to particularly point to BlockFi’s Interest Account (BIA), which offers rates that consumers are now becoming accustomed to in DeFi – but that have blown traditional banking rates out of the water. The ‘Unusual Three’ Crypto in it’s relatively early emergence in discussions around regulation and broader adoption, has largely been considered a somewhat bipartisan topic. Which makes the three states going after BlockFi a particularly unusual trio. New Jersey, the company’s home state and traditionally a very Democratic-run state at that, is arguably the most aggressive of the three states making claims against the firm. New Jersey has ordered BlockFi to stop offering it’s BIA product to state residents by July 29 according to a recent cease and desist from the state’s Bureau of Securities. Texas, a traditionally Republican-led state, has also issued a cease and desist with a hearing date currently set for October. The document also cites BIAs as a concern, stating that BlockFi “is, in part, illegally funding its lending operations and proprietary trading through the sale of unregistered securities in the form of cryptocurrency interest-earning accounts.” Finally, we have another typically Republic...