BlockFi ordered to stop opening new interest accounts in New Jersey

The popular cryptocurrency trading and lending platform BlockFi has been ordered by the New Jersey Bureau of Securities to suspend the acceptance of new users of interest accounts in the Garden State.

In a Twitter thread On Monday evening, Eastern Time, BlockFi CEO and Founder Zac Prince said the company remains operational for its existing customers in New Jersey, but that “the order calls on BlockFi to stop accepting new ones. BIA [BlockFi interest account] customers residing in New Jersey as of July 22, 2021.

Prince’s response came shortly after a Forbes article said the New Jersey attorney general and his securities office are preparing to issue a cease and desist order against the company.

The Forbes report cited a draft press release from the GA’s office, which allegedly stated that BlockFi’s service is being fueled “at least in part by the sale of unregistered securities in alleged violation of relevant securities laws. “.

BlockFi’s Interest Account is popular due to its high returns compared to its counterparts in the traditional financial services world, offering double-digit APYs while fintechs currently offer returns below 1%. The GA’s decision also came less than a month after BlockFi announced that the interest account product would support UNI, the governance token tied to the decentralized exchange Uniswap.

Originally, in a response to the Forbes article, Prince said BlockFi “is not aware of any imminent action with the New Jersey attorney general’s office.”