Texas is the third state this week to target BlockFi’s Bitcoin savings accounts

Texas is the latest state to try to crack down on the beleaguered crypto-lending platform BlockFi, according to a notice published today by the Texas State Bond Council.

State regulators have filed a termination and withdrawal request against BlockFi and two of its subsidiaries, BlockFi Lending and BlockFi Trading, for an alleged sale of unregistered securities.

It is an investment product called BlockFi Interest Account, which promises high returns in exchange for bank cryptocurrencies, such as Bitcoin.

New Jersey was the first state to prosecute BlockFi for its alleged trading in unregistered securities, filing a cease and desist earlier this week. Just yesterday, Alabama regulators attacked the company with a cause and show warning, essentially a threat, asking BlockFi to defend itself against a possible cease and desist.

In a tweet yesterday, the company wrote that “the BlockFi interest account is not a security.”

[2/2] Our position has not changed: BlockFI’s interest account is not a security.

– BlockFi (@BlockFi) July 21, 2021

A judge from the State Office of Administrative Hearings (SOAH) will decide in October whether BlockFi can continue to operate in Texas.

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