Regulatory Developments | BlockFi
BlockFi Interest Accounts (BIAs) are not insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC). BIAs are not registered with any federal or state securities regulatory authority.
BlockFi’s BIAs have been the subject of recent activity by securities regulators in New Jersey, Texas, Alabama, Vermont and Kentucky, and we are in active dialogue with these regulators. We believe that our products and services are lawful and appropriate for crypto market participants, and we remain steadfast in our commitment to protect consumers’ rights to earn interest on their crypto assets. We welcome discussions with regulators and believe that appropriate regulation of this industry is key to its future success.
On July 19, 2021, the New Jersey Bureau of Securities issued a summary cease and desist order stating that BIAs are unregistered securities under New Jersey law, and sought to stop BlockFi from opening new BIA accounts worldwide. Following discussions with the New Jersey Bureau of Securities to provide more details about the BIA, the Bureau has again postponed the effective date of its previous order, this time to February 1, 2022. All existing BIA clients, in New Jersey and worldwide, continue to have access to their accounts, and all other products, services, and assets on the BlockFi platform are unaffected.
Following the New Jersey Bureau of Securities’ July 19, 2021 order, securities regulators in Texas, Alabama and Vermont issued Show Cause orders establishing a process for BlockFi to share additional information with these regulators. On July 30, 2021, the Division of Securities of the Kentucky Department of Financial Institutions (KDFI) issued a cease and desist order regarding the BIA operations in the state of Kentucky. The order prohibits BlockFi from soliciting or offering any securities in Kentucky for existing and new clients. BlockFi disagrees with the KDFI’s views on the BIA, however, we will comply with this order and hope to engage in a constructive conversation with Kentucky regulators as to how BlockFi’s offerings are lawful and appropriate for crypto market participants.
The links to the regulatory orders are below:
Cease and Desist Orders:
Kentucky Department of Financial Institutions: Cease and Desist Order
Show Cause Orders:
Alabama Securities Commission: Show Cause Order
Vermont Department of Financial Regulation: Show Cause Order