Kentucky Regulators Crack Down on Blockfi Interest-Bearing Accounts

Kentucky Regulators Crack Down on Blockfi Interest-Bearing Accounts

The crypto lender Blockfi is now dealing with regulators from five states as Kentucky has joined the fray against the firm’s Blockfi Interest Accounts (BIAs). On July 30, Blockfi shared a statement on Twitter that explained the Kentucky Department of Financial Institutions (DFI) has sent the company an order that aims to ban new BIA accounts. Blockfi Now Has Problems With Regulators From 5 States

The New York City-based cryptocurrency finance company Blockfi was founded in 2017 by co-founders Zac Prince and Lori Marquez. The firm is a cryptocurrency lending firm that offers interest-bearing accounts called “BIAs” and also provides customers with a cryptocurrency-denominated credit card. Since January 2018, the company has allowed lending services that leverage crypto collateral.

Bitcoin.com News reported on Blockfi’s initial issues with New Jersey regulators which was followed by problems with Texas, Alabama, and Vermont. The regulators from all of the states take issue with the BIA products and statements indicate officials believe they might be unregistered securities.

Following the four states that sent notices to Blockfi, the Kentucky Department of Financial Institutions (DFI) sent the company an order, according to Blockfi’s official Twitter account.

“Friday afternoon we received an order from the Division of Securities of the Kentucky Department of Financial Institutions regarding the Blockfi Interest Account (BIA) operations in the state of Kentucky,” Blockfi’s message notes. The crypto lender’s message adds: The order prohibits Blockfi from soliciting or offering ant securities in Kentucky. Blockfi firmly believes that the BIA is lawful and appropriate for crypto market participants. But in light of the order, Blockfi will stop accepting new BIA clients residing in KY immediately.

Much like the other four states, Blockfi cannot allow individuals to create new BIAs until the issues with regulators are solved. So far, no other crypto companies have been targeted for offering interest via crypto accounts. Blockfi’s statement on Friday further adds that current BIA customers in Kentucky were not affected and like the statements it made prior, Blockfi says it is in discussions with U.S. regulators.

“We remain steadfast in our commitment to protect consumers’ rights to earn interest on their crypto assets,” Blockfi’s message concludes.

What do you think about the issues Blockfi has with Kentucky and the four other states? Let us know what you think about this subject in the comments section below. Finland Looking for Brokers to Sell Seized Bitcoins Worth $80 Million REGULATION | 1 day ago Malaysia Takes Enforcement Actions Against Binance, Advises Investors to "Withdraw All Investments Immediately" REGULATION | 1 day ago Tags in this story Alabama, BIA, Bias, Blockfi, Blockfi accounts, Crypto, Crypto lender, Cryptocurrency, Interest Bearing Accounts, Kentucky, New Jersey, Regulation, Regulators, Securities, Texas, unregistered securities, Vermont

Image Credits: Shutterstock, Pixabay, Wiki Commons Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments