BlockFi ordered to stop opening new interest accounts in New Jersey

BlockFi ordered to stop opening new interest accounts in New Jersey

Popular crypto trading and lending platform BlockFi has been ordered by the New Jersey Bureau of Securities to suspend accepting new interest account users in the Garden State.

In a Twitter thread on late Monday night Eastern time, BlockFi's CEO and founder Zac Prince said the firm remains operational for its existing clients in New Jersey but "the order calls for BlockFi to stop accepting new BIA [BlockFi interest account] clients residing in New Jersey beginning July 22, 2021."

Prince's response came just shortly after a Forbes article that said the New Jersey Attorney General is preparing to issue a cease and desist order to the firm.

The Forbes report cited a draft press release from the AG's office, which reportedly indicated that "BlockFi's service is powered "at least partly through the sale of unregistered securities in alleged violation of relevant securities laws."

BlockFi's interest account is popular because of its high-yields relative to its counter-parts in the traditional financial services world, offering double-digital APY while fintechs currently offer sub 1% yields.

In a response to the Forbes article, Prince said BlockFi "has no knowledge of any impending actions with the New Jersey Attorney General's office."