After the restrictions imposed by the state of New Jersey, now Alabama, Texas and Vermont also restricted BlockFi’s operations in the United States. The company, which provides financial services with cryptoassets, can no longer offer cryptocurrency savings accounts or add new customers.
The decision of the regulators of the aforementioned states, which was communicated in a publication of the company on its website, argues that the cryptocurrency savings accounts that BlockFi offers can be consideredsecurities
and that the firm does not have permission to provide these services. This interpretation arises from the interest that users can earn by depositing assets on the platform.
By considering these accounts as securities, state governments claim that this is an activity that must be approved and regulated by the U.S. Securities and Exchange Commission (SEC). BlockFi has a total of $15 billion under management, $691 million of which belongs to Texas users, according to Decrypt
Regarding the new court orders limiting its operations, BlockFi said it is “in active dialogue with multiple regulators to demonstrate that BIA (BlockFi Interest Account) is not a security and should not be regulated as such.” In that regard, the firm added that BIA complies with the law and is appropriate for cryptocurrency market participants.
While talks with regulators continue, BlockFi has clarified that its platform remains operational for absolutely all of its users around the world. “We remain steadfast in our commitment to fight for the rights of consumers to generate interest with their cryptoassets,” they add in the brief.
BlockFi informed its users about the situation with a post on Twitter. Source: Twitter.
Basically, the BlockFi Interest Account product allows users to deposit cryptocurrencies like bitcoin (BTC), ether (ETH), litecoin (LITE) and Tether (USDT). Then, when the account lock-in term expires, they generate profits from the interest on the deposited cryptocurrency, which varies depending on the term of the account and the price of the asset in question.
<img width=”1024″ height=”453″ src=”https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi-1024×453.jpg 1024w, https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi-300×133.jpg 300w, https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi-768×340.jpg 768w, https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi-560×248.jpg 560w, https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi-750×332.jpg 750w, https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi-1140×505.jpg 1140w, https://mk0criptonoticijjgfa.kinstacdn.com/wp-content/uploads/2021/07/promocion-cuentas-intereses-blockfi.jpg 1299w” alt=” /> BlockFi’s site can be seen touting this interest-bearing account with a “7.5% annual percentage yield.” Source: blockfi.com
BlockFi’s troubles in every state
The “bad run” of legal setbacks for BlockFi began last July 20, when it was learned that the New Jersey Bureau of Exchange barred it from accepting new customers in the territory for its interest-bearing account service. As CryptoNews reported, the order has been in effect
since July 22.
Later that week, the U.S. company also received similar lawsuits in the states of Alabama and Texas. Finally, Vermont was the most recent to join the states requesting BlockFi to cease its activities in relation to the challenged product.