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The New Jersey Bureau of Securities had issued a cease-and-desist order against centralized crypto-lending firm BlockFi. It accuses BlockFi of offering unregistered securities to its customers.
BlockFi’s CEO confirmed that the company had received an order from the bureau
According to an article of Forbes the New Jersey Office of the Attorney General, the Bureau of Securities plans to issue a Summary Cease and a cease-and-desist order against New Jersey-based inancial services platform BlockFi.
On July 20, Zack Prince, the CEO of BlockFi, confirmed that the company had received an order from the New Jersey Bureau of Securities requiring it to stop onboarding BlockFi Interest Account (BIA) customers residing in the state by July 22.
The current situation could change how states might proceed in similar cases
The draft statement emphasizes how decentralized financial platforms, known in the industry as DeFi, do not similarly offer FDIC or SIPC insurance as traditional banks and brokerages do. However, while BlockFi provides identical services like DeFi platforms do, such as AAVE or Compound, it is a centralized company.
While Bitcoin and Ether are widely viewed as commodities due to comments and actions by SEC and the CFTC, there is less clarity on other BlockFi-backed assets like Chainlink and Uniswap. If the cease-and-desist letter is eventually signed, it could set a precedent for how states might deal with other yet-to-be-categorized assets.
Binance has also come under pressure for not being properly licensed. Financial Conduct Authority accuses its subsidiary, Binance Markets Limited (BML), of offering unlicensed services in the United Kingdom and the cryptocurrency exchange has received several warnings from regulators worldwide.
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