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Finance

NJ Regulators Give BlockFi 1 Week Before Blocking New Interest Accounts

The state’s securities regulator contends BlockFi is selling an “unregistered security” to its customers.

By Danny Nelson
AccessTimeIconJul 21, 2021 at 7:31 p.m. UTC
Updated May 9, 2023 at 3:21 a.m. UTC
BlockFi app

New Jersey regulators are giving crypto lender BlockFi an extra week before its ban on the creation of new interest-bearing accounts will take effect, CEO Zac Prince tweeted Wednesday.

Prince said New Jersey’s Bureau of Securities (NJ BOS) “has postponed the effective date” of Tuesday’s surprise order to stop the sale of BlockFi interest accounts until July 29. Originally, the order was set to hit on July 22.

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    • NJ BOS contends that BlockFi Interest Accounts amount to unregistered securities; BlockFi claims they are not.

    The extra week buys BlockFi some time to navigate the ramifications of the regulator’s order. That said, it could be a body-blow to the crypto lender. NJ BOS has said BlockFi holds $14.7 billion in assets through its BIA product. (How much of that is held by New Jersey consumers is unclear.)

    BlockFi’s Prince has repeatedly said the cease-and-desist will not impact existing BlockFi customers, a claim the NJ BOS order appears to echo.

    Less clear, however, is the extent to which this could impact new BlockFi customers, and whether its impact could spread beyond New Jersey.

    BlockFi declined to comment further. NJ BOS did not immediately comment.

    Disclosure

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    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.