Block.Fi Receives Further Scrutiny From the United States Regarding Interest Accounts

Fifth cease-and-desist lodged against Block.Fi in Kentucky, as the crypto lender receives a month-long reprieve from New Jersey regulators.

Scrutiny Intensifies

The walls seem to be closing in on Block.Fi, as the Kentucky Department of Financial Institutions becomes the fifth state regulator to put forward that the lender’s interest service violates state securities laws.

Previous accounts in the state currently remain unchanged, but prospective clients will be unable to open new accounts. Vermont, Alabama, New Jersey, and Texas had already alleged that Block.Fi Interest Accounts (BIAs) breach relevant state securities laws.

On July 30th, the Kentucky regulator also ordered Block.Fi to stop opening new accounts in the state. 

“Friday afternoon we received an order from the Division of Securities of the Kentucky Department of Financial Institutions regarding the Block.Fi Interest Account (BIA) operations in the state of Kentucky,” The crypto lender announced via official social media channels. “The order prohibits Block.Fi from soliciting or offering any securities in Kentucky. Block.Fi firmly believes that the BIA is lawful and appropriate for crypto market participants.


Does Block.Fi Have A Case?

At this point, we can only speculate regarding the chances of regulatory compliance, though, as stated above, the team at Block.Fi is adamant that their practice is lawful. 

The state regulators seem open to providing an opportunity for Block.Fi to offer evidence in support of its practices being within legal parameters. As reported by CoinDesk’s Nelson Wang on the 28th of July, New Jersey regulators have in fact decided to grant Block.Fi at least another month to compile necessary evidence and documentation supporting their claims.

Importantly, the aforementioned regulators appear to have an appetite to offer Block.Fi an opportunity to defend itself. The outcome of this particular matter could offer some much-needed regulatory clarity. 

What is Block.Fi

Founded in 2017 by Zac Prince and Flori Marquez, Block.Fi was constructed to provide credit services to markets with limited access to simple products like savings accounts. The company tries to distinguish itself from other crypto asset providers by pairing market-leading rates with institutional-level benefits. 

Block.Fi boasts institutional backing from impressive investors like Valar Ventures, Galaxy Digital, Fidelity, Akuna Capital, SoFi, and Coinbase Ventures. The team comprises specialists with a deep knowledge of an array of financial services and technology, with offices in New York, New Jersey, Poland, and Argentina.

Follow Block.Fi on the web:

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