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The New Jersey Bureau of Securities has extended the deadline given to BlockFi to stop offering the BlockFi Interest Account (BIA) in the state. This was revealed by BlockFi CEO Zac Prince.
NJ Regulators Postpone Deadline To September
In a blog post, the BlockFi boss said the firm had been given until September 2 before the order directing it to block all new accounts takes effect. Prince said in a blog that the postponement was a result of the ongoing talks with the regulators to provide more details about the BIA service.
"We've said time and again that the key to our industry's success is appropriate regulation. Ultimately, we see this as an opportunity for BlockFi to help define the regulatory environment for our ecosystem."
NJ BOS had initially filed a cease and desist order against the company on July 19, demanding that new BIAs, which promise up to 7.5% annual returns on deposited crypto, cease by July 22. The order was later delayed until July 29. According to NJ BOS, BlockFi holds $14.7 billion in assets through the deposits on its BIA product. The New Jersey regulators said that the BlockFi Interest Accounts were unregistered securities, although BlockFi argued that they are not. The crypto lender had previously said in a tweet that the accounts are lawful and appropriate for crypto market participants. It would continue to remain committed to offering consumers rights to earn interest on their crypto assets.
BlockFi Facing Scrutiny From Other Regulators
New Jersey is not the only state that has gone after BlockFi over its interest-bearing crypto accounts. The firm is also facing similar scrutiny from Alabama. Last week, the Alabama Securities Commission (ASC) issued a show-cause order to BlockFi directing the firm to explain why it should not be required to stop selling unregistered securities in Alabama. BlockFi was also given a 28 days deadline to respond. The crackdown against BlockFi's Interest accounts has gone beyond New Jersey and Alabama as regulators in Texas, and most recently Vermont are also sanctioning BlockFi for the BIAs. Launched in 2017, BlockFi is one of the leading cryptocurrency lenders with different products ranging from crypto-backed loans to interest-earning accounts. BlockFi recently launched its first-ever crypto rewards credit card in partnership with Visa dubbed the BlockFi Rewards Visa Signature Credit Card. Earlier this year, the firm raised $350 million in a series D funding which saw its value shoot up to $3 billion. The company recently said it was on track to raise more than $500m in funding round. The New Jersey-based company reportedly plans to go public within the next 12 to 18 months.