Texas Regulator Moves against BlockFi for Securities Law Violation
- The company is facing similar allegations in New Jersey and Alabama.
The Texas state regulator has become the latest to move against crypto unicorn BlockFi, alleging that the BlockFi Interest Account (BIA) has possibly violated the state securities laws. This is the third US state regulator moving against the company in a week: earlier the state of Alabama and New Jersey issued similar notices.
The Texas State Securities Board (TSSB) filed for a cease-and-desist order against BlockFi, BlockFi Trading and BlockFi Lending, according to a notice published on Thursday. However, a court hearing is pending on October 13 for the approval of the order.
In addition, the notice is seeking BlockFi’s response on the matter within 20 days of serving. But, the company will be allowed to continue to offer its services until the court approves the cease-and-desist order.
Interestingly, the Texas regulator said that it informed BlockFi about the first possible violation in April.
“The Enforcement Division also explained [on April 20] the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of the securities market in Texas, including the identification of laws that require the registration of securities, the registration of dealers and agents, and the truthful disclosure of all known material facts. Nevertheless, Respondents have continued to offer the BIAs to Texans in violation of Sections 7 and 12 of the Securities Act,” the recent notice stated.
According to the TSSB, BlockFi has at least 25,000 clients in Texas with crypto deposits of around $691 million on the platform.
Regulatory Pressure Mounts
The Texan order came only a day after the Alabama state regulator moved against BlockFi for violating state regulations with its interest-bearing accounts. The New Jersey regulator was the first to issue a similar notice to BlockFi earlier this week, ordering it not to accept BIA clients.
However, BlockFi defended its position against these allegations and clarified on Twitter that its interest-bearing accounts cannot be categorized as securities.
The Texas state regulator has become the latest to move against crypto unicorn BlockFi, alleging that the BlockFi Interest Account (BIA) has possibly violated the state securities laws. This is the third US state regulator moving against the company in a week: earlier the state of Alabama and New Jersey issued similar notices.
The Texas State Securities Board (TSSB) filed for a cease-and-desist order against BlockFi, BlockFi Trading and BlockFi Lending, according to a notice published on Thursday. However, a court hearing is pending on October 13 for the approval of the order.
In addition, the notice is seeking BlockFi’s response on the matter within 20 days of serving. But, the company will be allowed to continue to offer its services until the court approves the cease-and-desist order.
Interestingly, the Texas regulator said that it informed BlockFi about the first possible violation in April.
“The Enforcement Division also explained [on April 20] the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of the securities market in Texas, including the identification of laws that require the registration of securities, the registration of dealers and agents, and the truthful disclosure of all known material facts. Nevertheless, Respondents have continued to offer the BIAs to Texans in violation of Sections 7 and 12 of the Securities Act,” the recent notice stated.
According to the TSSB, BlockFi has at least 25,000 clients in Texas with crypto deposits of around $691 million on the platform.
Regulatory Pressure Mounts
The Texan order came only a day after the Alabama state regulator moved against BlockFi for violating state regulations with its interest-bearing accounts. The New Jersey regulator was the first to issue a similar notice to BlockFi earlier this week, ordering it not to accept BIA clients.
However, BlockFi defended its position against these allegations and clarified on Twitter that its interest-bearing accounts cannot be categorized as securities.