Texas alleges that BlockFi is offering unregistered securities
July 22, 2021. Summarized by summa-bot.
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The Texas State Securities Board is alleging BlockFi is illegally funding its crypto lending operations and proprietary trading through the offering of BlockFi Interest Accounts.
The Texas State Securities Board has filed for a cease and desist order against crypto lending firm BlockFi for not offering a security licensed at the state or federal level.
According to a Thursday filing, the state regulator will be holding a hearing related to allegations BlockFi is illegally funding its crypto lending operations and proprietary trading through the sale of unregistered securities.
Should the judge accept that the platform’s accounts earning interest on crypto represent unlicensed securities, BlockFi may be subject to a cease and desist order.
Should the judge grant the order at the Oct. 13 virtual hearing, BlockFi and its affiliates BlockFi Lending and BlockFi Trading would likely be required to stop offering BlockFi Interest Accounts in the state without registering with a local regulator or the U. S. Securities and Exchange Commission.
Texas’ Enforcement Division of the State Securities Board notified BlockFi on April 20 that it may not have been in compliance with the state’s Securities Act with its interest accounts.
With the exception of BlockFi, Texas has generally been a state welcoming to crypto and blockchain firms.