BlockFi CEO Zac Prince recently took to Twitter to bring more clarity to the table regarding a cease-and-desist letter from an order from the New Jersey Bureau of Securities, a state regulatory agency that operates within the Office of the Attorney General.
Prince claims that the leading cryptocurrency lender remains “fully operational” for clients in the state but won’t be able to open new interest accounts starting from July 22, 2022.
We remain fully operational for our existing clients in New Jersey.— Zac Prince (@BlockFiZac) July 20, 2021
All aspects of the BlockFi platform continue to be accessible to our clients in New Jersey.
The order calls for BlockFi to stop accepting new BIA clients residing in New Jersey beginning July 22, 2021.
His response came after Forbes broke the news about the impending enforcement action against the company.
BlockFi is reportedly accused of violating securities laws with its interest account product. Apart from Bitcoin, it supports a slew of more exotic cryptocurrencies, such as Chainlink and Uniswap.
Prince says that he disagrees with the action since he believes that their interest account product is not a security.
He adds that BlockFi will continue engaging with “all relevant authorities”:
We will continue to engage with all relevant authorities to protect our clients’ interests and ensure that our products remain available.
A streak of bad luck
As reported by U.Today, the New Jersey-based firm was reportedly in talks to have another funding round that would boost its valuation to $5 billion.
Despite riding high on the coattails of the last bull run, BlockFi recently had a streak of bad luck.
Apart from its recent predicament with New Jersey’s securities regulator, the crypto lender mistakenly sent its users millions of dollars worth of Bitcoin during a promotional giveaway that ended up being a major PR disaster in May.
Earlier this year, BlockFi, one of the biggest holders of shares of Grayscale Bitcoin Trust, also got hit hard by the fund’s persistent discount.