decrypt.co
BlockFi is back in the news after financial regulators in the state of Alabama claimed that the crypto company’s Bitcoin savings accounts are securities.
Alabama is the second state to lock horns with the firm after the Attorney General of New Jersey ordered the company to stop accepting new customers.
Regulators in Alabama have taken a slightly different approach, however.
Instead of forcing the company to halt operations for Alabamans, the Alabama Securities Commission (ASC) has issued a show-cause notice. In it, Director Joseph Borg has ordered BlockFi to explain “why they should not be directed to cease and desist from selling unregistered securities in Alabama.”
This language indicates that the ASC, like regulators in New Jersey, views BlockFi’s high-interest crypto savings accounts, called BlockFi Interest Accounts, as unregistered securities offerings.
These accounts can earn users up to 8.5% on their crypto holdings, including Bitcoin, Tether, and Litecoin. The products’ popularity has also raked in nearly $15 billion for BlockFi, according to local reports.
[1/1]We are aware of the show cause order issued by the Alabama Securities Commission. We have active dialogues with regulators worldwide, including those in Alabama, to share details about our products, which we believe are lawful and appropriate for crypto market participants.
— BlockFi (@BlockFi) July 21, 2021
The company was quick to fire back on Twitter, stating “the BlockFi Interest Account is not a security,” and that the firm is “aware” of the latest show-cause notice. The crypto company has 28 days to respond to the notice.