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Seeking Alpha 2021-07-22 20:09:32

Texas deals blow to BlockFi interest accounts, alleging securities laws violations

dulezidar/iStock Editorial via Getty Images The Texas State Securities Board files for a cease and desist order against the cryptocurrency platform BlockFi, BlockFi Trading, and BlackFi Lending, CoinDesk reports, citing people with knowledge on the matter. The state, hoping to secure a judge's sign-off after an October hearing, is seeking to block BlockFi from offering the BlockFi Interest Account without at least registering with the state securities regulator. Texas contends that the companies' customers put their cryptocurrencies in the lending platform's control, pooling them with other customer's and corporate funds, for BlockFi to then invest, which may be a securities law violation, CoinDesk says. BlockFi can continue operations until the hearing. "The BIs constitute investment contracts, notes, or evidence of indebtedness regulated as securities as that term is defined by Section 4.A of the Securities Act," according to the filing. Texas is the third state, following Alabama and New Jersey,

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