Just a few days after being served a Cease and Desist Order by the New Jersey Bureau of Securities, popular crypto lending platform BlockFi has received an extension of the date the ban will take effect.
According to a recent tweet from BlockFi, New Jersey authorities have further moved the effective date of its Cease and Desist Order from July 22 to September 2, 2021.
BlockFi also clarified that although the order had demanded that no new BIAs be created, it does not affect its current BIA clients or any of its other products and services.
Clients from all over the world still have access to all BlockFi products, services, and assets, the tweet added.
New Jersey Cracks down on BlockFi
On July 20, BlockFi revealed that it had been mandated by New Jersey securities regulators to stop offering its BlockFi Interest Accounts (BIAs) in the region.
The New Jersey Bureau of Securities alleged that BlockFi had violated securities laws by failing to register its interest-bearing accounts with state regulators and that could be classified as engaging in an unregistered securities offering.
These BIAs allow clients to deposit their crypto assets and earn interest, up to 8.5%, depending on how much they invested and the type of assets they deposited.
While state regulators are arguing that BIAs are securities, BlockFi still maintains that they do not fall under the category of securities within the state securities laws.
BlockFi added in its tweet today,
“We firmly believe that the BIA is lawful and appropriate for crypto market participants, and we remain steadfast in our commitment to fight for consumers’ rights to earn interests on their crypto assets.”
Increasing Regulatory Scrutiny on Crypto Businesses
Several major cryptocurrency exchanges have been experiencing increasing scrutiny of their activities by global financial regulators.
On the top of the list is the leading cryptocurrency exchange, Binance, which is currently being investigated by almost every financial regulator across the world.
In a recent development, Binance’s CEO, Changpeng Zhao, revealed that he is willing to step down as CEO if a capable senior compliance officer is found to take over the affairs of the exchange, as it plans to expand “everywhere”.