BlockFI has ordered to stop referring customers based in New Jersey

The New Jersey Securities Office has issued a cease and desist order to a centralized crypto lender, BlockFi, to prevent it from reaching customers with new interest accounts in the state.

The news was first announced by Forbes on July 19, with the agency citing an undated, unpublished draft press release revealing that the New Jersey Securities Bureau plans to issue the Summary Discontinuation and Revocation Order for BlockFi.

The draft has reportedly accused BlockFi of offering unregistered securities to its customers. The document is said to quote Acting Attorney General Andrew J. Bruck as saying:

“Our rules are simple: If you sell securities in New Jersey, you must comply with New Jersey securities laws. Nobody gets a free card just because they are in the rapidly evolving cryptocurrency market. “

On July 20th, Zack Prince, CEO of BlockFi, Approved The company has received an instruction from the New Jersey Securities Bureau asking it to stop referring BlockFi Interest Account (BIA) customers residing in the state effective July 22nd.

“BlockFi is in an ongoing dialogue with regulators to help them understand our products that we believe are legitimate and relevant to crypto market participants,” said Prince, adding:

“BIA is not a security and so we do not consent to the actions of the New Jersey Securities and Exchange Commission.”

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The news comes about a month after Prince announced that upcoming crypto regulations will benefit the industry.

The order comes as regulators around the world appear to be stepping up crackdown on unregulated sectors in the crypto industry.

Cointelegraph reported today that US Treasury Secretary Janet Yellen has urged lawmakers to quickly enact regulations on stablecoin.

Binance has also been criticized for allegedly operating without a valid license with the UK Financial Conduct Authority, claiming that its subsidiary Binance Markets Limited (BML) provides trading services.

In China, regulators have also taken control of local bitcoin mining operations, which has caused the bitcoin network’s hash rate to drop 54% since May 29.