5th State Issues a Warning Against BlockFi as the Crypto Lender Engages with Regulators
Crypto lender BlockFi has received another warning, and this time it’s from Kentucky.
The cryptocurrency trading and financial services provider received an order from the Division of Securities of the Kentucky Department of Financial Institutions (KDFI) on Friday regarding the state's BlockFi Interest Account (BIA) operations.
According to the order, BlockFi is prohibited from soliciting or offering any securities in the state.
BlockFi meanwhile maintains that BIA is lawful and appropriate for crypto market participants.
However, effective immediately, the firm will stop accepting new BIA clients residing in KY. This does not affect its existing clients, who will continue to access the products, services, and assets on the BlockFi platform. BlockFi said in a statement,
“BlockFi has been actively engaging with multiple regulators. We remain steadfast in our commitment to protect consumers' rights to earn interest on their crypto assets.”
This month, BlockFi also received the same prohibitive orders from New Jersey, Texas, Vermont, and Alabama, where they have stopped accepting new customers and continue to be in active dialogue with regulators regarding its Interest Account.
This week, meanwhile, the New Jersey Bureau of Securities (NJ BOS) postponed the effective date of its order to Sept. 2, 2021, following their discussion. Texas securities regulators have also allowed the company to provide evidence to support its claims and have a hearing scheduled for early October.
Despite all the regulatory pushback, the company is reportedly still pursuing a $500 million Series E funding round, that too ahead of a possible public offering.