Blockfi is currently under attack by 5 US-state level regulatory agencies, (New Jersey, Alabama, Texas, Florida and Vermont) which all claim that BlockFi Interest Accounts (BIAs) are not registered with regulators, making BIA’s an unregistered security.
The New Jersey Bureau of Securities issued a cease and desist notice against Blockfi on July 19th. Texas filed a cease and desist against Blockfi, BlockFi Trading and BlockFi Lending. The cease and desist from The Texas State Securities Board won’t take effect until a judge signs off after a hearing occurs in October.
The company is allowed to continue operating until the hearing. The cease and desist order would prevent BlockFi from offering their main service (BIA) without registering with the state’s securities regulator.
BlockFi has came out with statements regarding this regulatory attack saying,
An update on regulatory conversations: pic.twitter.com/0TYqSfBk4i
— BlockFi (@BlockFi) July 28, 2021
@BlockFi was built on transparency and trust. Following a productive conversation with regulators in New Jersey, they have further postponed the effective date of their order to September 2nd. Read more in my letter to our clients here: https://t.co/SCjVSaRgr3
— Zac Prince (@BlockFiZac) July 28, 2021
As shown above, BlockFi keeps reiterating the same comment each time a new state has joined the attack against them. BlockFi continues to post regularly on twitter, business as usual despite butting heads with state regulators. If BlockFi is able to beat the regulators in this battle, it would be a big win for crypto companies to show that digital asset companies can fight back successfully.
As we know, Binance and Coinbase have also had recent regulatory issues, it may be time to start looking at Decentralized Finance Web 3.0 until the regulators have figured out what they are going to do or not do with all the centralized crypto lending apps.
According to Defipulse, the Total Value Locked in Defi Protocols in USD in July 2020 was 2.17 Billion. 1 year later in 2021 July, it is currently at 29.39 Billion USD. DeFi protocols are getting more and more popular and maybe it’s time you give it a look!
As always, as the story unfolds, we’ll keep you updated. In the meantime, Blockfi has posted a notice on their website that states, “For Important Regulatory Developments Regarding BlockFi Interest Accounts please visit https://blockfi.com/disclosures-and-complaints.