BlockFi ban on new interest accounts in New Jersey extended yet again

Getting your Trinity Audio player ready...

The securities regulator in New Jersey has extended again the deadline for when it will enforce the ban on the creation of BlockFi’s interest accounts. The ban was first meant to go into effect on July 22, but the new extension pushes the deadline to December 1.

New Jersey was the first state in the U.S. to crack down on BlockFi back in July. The state’s Bureau of Securities ordered the lending company to cease and desist, accusing it of offering unregistered securities. The regulator gave the company until July 22 to cease opening new interest accounts.

However, this deadline was extended to September 2 and then later to September 30. And now, BlockFi has announced that it has received a two-month reprieve from the BIA.

Further extension of New Jersey Bureau of Securities order. Read more at https://t.co/0cI8TrzHfI pic.twitter.com/VwqjzUHsWp

— BlockFi (@BlockFi) September 22, 2021

In an update, the company said it was in active dialogue with regulators regarding its interest accounts, noting, “We firmly believe that it’s lawful and appropriate for crypto market participants. We remain steadfast in our commitment to fight for consumers’ rights to earn interest on their crypto assets.”

New Jersey’s cease-and-desist order only applies to the creation of new interest accounts. As such, it has no impact on the current clients or any of the other BlockFi products, the Zac Prince-led firm further clarified.

“All existing BIA clients, in New Jersey and worldwide, continue to have access to their accounts. All other products, services and assets on the BlockFi platform are unaffected,” the firm, which is based in Jersey City, stated.

In what has now become a digital currency lending purge, regulators in four states have taken a similar position to New Jersey against BlockFi. Its rival Celsius faces a similar fate in three states. Coinbase is also having its own set of lending-related regulatory trouble with the SEC.

Prince has dismissed the state crackdown, adamantly stating that he awaits direction from federal regulators.

He stated, “We’re not going to decide what box crypto lending belongs to based on what New Jersey does or what Texas does, or what any one other state does. It’s going to come down to federal regulators like the SEC, or the OCC, creating a path for this type of activity to happen.”

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—afrom BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.