US state authorities have opened a new front in the regulatory crackdown on the cryptocurrency business, taking aim at BlockFi, a company that has raised $14.7bn by offering interest-bearing crypto accounts.
In recent days Texas, New Jersey and Alabama have alleged the accounts amounted to an unregistered offering of securities. New Jersey ordered the company to stop offering the product from July 29, and the other US states threatened to take similar steps unless BlockFi could dissuade them.
“Our rules are simple: if you sell securities in New Jersey, you need to comply with New Jersey’s securities laws,” Andrew Bruck, the state’s acting attorney-general, said on Tuesday. “No one gets a free pass simply because they’re operating in the fast-evolving cryptocurrency market.”
New Jersey-based BlockFi said in a tweet its interest-bearing account “is not a security” and believed it was “lawful and appropriate for crypto market participants”. It added: “We remain steadfast in our commitment to fight for consumers’ rights to earn interest on their crypto assets.”
The regulatory flurry at the state level was particularly significant because it came as national authorities in Washington have been scrambling to formulate rules for cryptocurrencies.
Political observers noted that until July 16, the New Jersey attorney-general’s office had been headed by Gurbir Grewal, who has left the…