Alabama regulators accuse BlockFi of offering unregistered securities
July 22, 2021. Summarized by summa-bot.
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The Alabama Securities Commission is the second regulator in the U.S. to allege that BlockFi’s Interest Accounts are unregistered securities.
The Alabama Securities Commission (ASC) has issued a show cause order to New Jersey-based company BlockFi, ASC director Joseph Borg officially announced Wednesday.
Already facing a cease and desist order from the New Jersey Bureau of Securities, BlockFi now has 28 days to provide cause why the platform should not be forced to cease and desist from selling “unregistered securities” in Alabama, the regulator said.
The order also claimed that BlockFi has failed to disclose to investors that its BIAs are not approved by the ASC or any other securities regulator, despite the firm touting itself as a “U. S. regulated entity. ”
BlockFi subsequently said that the company was aware of the ASC’s show cause order, assuring that it has been engaged in “active dialogues with regulators worldwide,” including those in Alabama.
The firm remains confident that its products are lawful and appropriate for crypto market participants, BlockFi said, adding, “Our stance hasn't changed — the BlockFI Interest Account is not a security. ”
The ASC’s action comes two days after the New Jersey securities regulator issued a cease and desist order to BlockFi, blocking the platform from onboarding new interest account clients in the state.