Vermont is the fourth state to target BlockFi’s Bitcoin savings accounts

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  • Vermont joined the ranks of New Jersey, Alabama and Texas in raising regulatory concerns about BlockFi’s high-yield interest account.
  • State regulators argue that BlockFi’s interest account is an unrecorded security.
  • company denies these claims.

Vermont is the fourth state to issue an order against cryptocurrency lending firm BlockFi’s high-interest savings accounts to offer unregistered securities.

Details of the notice notified by Vermont’s financial regulator are not yet available, but BlockFi has informed customers of its existence on its website.

BlockFi and the Vermont State Securities Division did not immediately respond to the request for comment.

Last week, regulators in New Jersey, Texas and Alabama opened investigations against BlockFi and two of its subsidiaries, BlockFi Lending and BlockFi Trading.

Regulators say that BlockFi’s interest accounts, which advertise high returns for clients depositing cryptocurrencies, are equivalent to unregistered securities.

securities are investment contracts. Your sales in the United States must be registered with the country’s Securities and Exchange Commission.

Regulators argue that BlockFi loan accounts are equivalent to securities because when BlockFi clients deposit their cryptocurrencies, they expect BlockFi to earn their interest.

BlockFi denies that these accounts constitute securities offerings. In a tweet on July 23, the company said it is discussing things with regulators.

2 / BlockFi is fully operational for all existing customers around the world and customers will continue to have access to all products, services and resources at BlockFi.

– BlockFi (@BlockFi) July 22, 2021

“BlockFi is fully operational for all existing customers around the world and customers will continue to have access to all products, services and resources at BlockFi,” the company said.

BlockFi’s Troubled Week

It all started Monday when the New Jersey Attorney General ordered BlockFi to stop accepting new clients in the state, where the four-year-old company is also based. order did not stop BlockFi from serving existing clients in the state.

On Wednesday, Alabama regulators asked BlockFi to defend itself against a possible termination and disapproval order. company has 25 days to make a convincing argument.

And on Thursday, the Texas State Securities Board (TSSB) notified the company of a cease and desist order that could take effect after a hearing on October 13.

BlockFi has $ 15 billion in assets under management, according to the TSSB notice. $ 691 million of these assets come from Texas residents.

BlockFi stores clients ‘assets in third-party custodial vaults such as Gemini, BitGo and Coinbase, which have held 43% of their clients’ assets since the first quarter of 2021. rest is in liquid investments or loans. company says it does not owe customers anything if it loses its cryptocurrency due to operational or technical difficulties.

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