BlockFi CEO Zac Prince confirmed earlier this week that the company received a cease-and-desist order from the New Jersey Bureau of Securities
According to BlockFi CEO Zac Prince, the New Jersey Bureau of Securities (NJBoS) has ordered the crypto lending firm to stop offering interest-bearing crypto accounts to new customers in New Jersey. Headquartered in New Jersey, the company has offered the BlockFi Interest Account (BIA) since 2019. Prince said the regulator’s order will not affect existing customers, and all features of BlockFi’s platform will remain available to them.
“We remain fully operational for our existing customers in New Jersey. All aspects of the BlockFi platform continue to be available to our customers in New Jersey. The order requires BlockFi to stop offering BIA to new customers who reside in New Jersey as of July 22, 2021,” Prince stated.
He also confirmed that BlockFi is continuing to cooperate with authorities to review the available products and ensure they are compliant and appropriate. Prince disputed the NJBoS’s conclusion that the BIA constitutes a security, and said the company will continue to safeguard its customers’ interests.
Acting New Jersey Attorney General Andrew Bruck explained that the order stemmed from the sale of unregistered securities, which violates New Jersey securities law. He emphasized that the state is closely monitoring the cryptocurrency sector to ensure investor protections are followed and warned that no entity is exempt from compliance simply because it operates in a rapidly evolving market.
“No one gets a free pass just because they operate in the fast-changing crypto market,” Bruck said.
Bruck added that BlockFi did not offer the same interest-bearing accounts in other states, including New York, possibly due to differing state regulations. Following the announcement, Kaitlin Caruso, Acting Director of the Division of Consumer Affairs, highlighted that decentralized finance (DeFi) products carry a high level of risk—often higher than the volatility of cryptocurrency itself. She warned that although companies like BlockFi may resemble traditional financial platforms, those structures can leave investors without sufficient protections.
The New Jersey order drew criticism from some users who argued that BlockFi’s interest accounts did not constitute securities. Some observers suggested the state’s action could be perceived as protecting traditional banks. After New Jersey’s move, the Alabama Securities Commission issued a similar directive. Yesterday, the Alabama regulator ordered BlockFi to “disclose its intentions,” warning that failure to comply could lead to a ban for offering unregistered securities.