- BlockFi crypto firm has received a heavy hit from the New Jersey Attorney general
- The New Jersey Attorney has accused the crypto firm of violating the country’s securities law
- The law authority has ordered the firm not to expand its users base in the region
- BlockFi is working to help the authorities understand the products of the firm
BlockFi allows its users to borrow funds or earn interest on their crypto holdings. The firm has recently got a hit like other crypto firms globally are facing. Andrew J. Bruck, the Attorney general of New Jersey, has accused the firm of contravening securities laws. Moreover, Bruck has also prohibited the firm from expanding its user base in New Jersey. Hence, the cryptocurrency firm cannot offer its services to new clients in New Jersey. The firm has a well-known name in the industry, and the recent prohibitions would drastically impact the firm.
BlockFi has been accused of violating laws
On Monday, Zac Prince, BlockFi CEO, revealed in a tweet that the firm had been accused of violating rules by the New Jersey Bureau of Securities. Hence, the Attorney ordered to prohibit BlockFi Interest Account (BIA) operations in the State of New Jersey.
New Jersey residents cannot enjoy high yields
The crypto firm is famous for offering yields of up to 7.9%. Users of the platform who are willing to lend their assets can opt for such ways to earn from their holdings. Price also revealed a statement of the Attorney. Indeed, the firm has been prohibited from accepting new clients from the State of New Jersey. Notably, the restriction will come into force from July 22, 2021.
However, the CEO has also clarified that the platform will remain fully operational for its existing clients from New Jersey. Indeed, all aspects of the platform will continue to be accessible to its clients in the region.
BlockFi’s platform should comply with rules
According to Bruck, the state’s simple rule is if a firm wants to sell securities in the region, it needs to comply with the law. Indeed, no one will get any free pass for operating in the booming crypto industry. The Attorney also mentioned that their bureau would closely monitor the issue as they seek to protect their clients.
Apart from the factors, the authority is also seeking to study the entire work of the firm. Notably, the Attorney is trying to find out whether operation as the whole of BlockFi in the region violates the country’s securities laws.
BlockFi’s team is working to collaborate with regulators
In the tweet thread shared by BlockFi CEO, he also revealed that the firm collaborates with regulators. Prince explained that the firm is engaged in an ongoing dialogue with the authorities to help them understand their product better. The team behind the firm believes that such steps are lawful and appropriate for crypto market participants.