New Jersey securities regulators have accused BlockFi CEO Zack Prince of marketing unlicensed securities to the general public, Prince however denied the allegations.
According to the New Jersey Bureau of Securities, BlockFi, a centralised crypto lending firm, has been issued a cease and desist order, which prevents the company from onboarding new interest account clients in the state.
Forbes was the first to report the news on July 19, citing an undated, unpublished draught press release that suggested that the New Jersey Bureau of Securities was going to issue a Summary Cease and Desist order to BlockFi. The New Jersey Bureau of Securities is the state’s securities regulator.
According to reports, BlockFi is being accused of providing unregistered securities to its customers in the draught. It was said in the document that Acting Attorney General Andrew J. Bruck stated the following:
“Our rules are simple: if you sell securities in New Jersey, you need to comply with New Jersey’s securities laws. No one gets a free pass simply because they’re operating in the fast-evolving cryptocurrency market.”
On July 20, BlockFi’s CEO, Zack Prince, revealed that the company had received an order from the New Jersey Bureau of Securities requiring it to halt onboarding BlockFi Interest Account (BIA) clients located in the state as of July 22.
“BlockFi is engaged in an ongoing dialogue with regulators to help them understand our products, which we believe are lawful and appropriate for crypto market participants,” Prince said, adding:
“BIA is not a security, and we, therefore, disagree with the action by the New Jersey Bureau of Securities.”
Approximately one month after Prince suggested that impending cryptocurrency restrictions will be beneficial to the business, this revelation comes as a surprise.
Regulators throughout the world appear to be taking more action against unregulated areas of the cryptocurrency industry, as seen by the recent issuance of the order.
Cointelegraph revealed earlier today that United States Treasury Secretary Janet Yellen has pushed Congress to pass stablecoin laws as soon as possible.
It has also come under fire from the United Kingdom Financial Conduct Authority (FCA) for allegedly operating without proper licences. The FCA has accused Binance’s subsidiary, Binance Markets Limited (BML), of offering unlicensed services to customers in the United Kingdom.
Regulations in China have also tightened their grip on local Bitcoin mining companies, which has resulted in a 54 percent drop in the hash rate of the Bitcoin network since May 29.