MONTGOMERY, Ala. (WIAT) — The Alabama Securities Commission (ASC) has made a first step towards banning a cryptocurrency company from selling in the state.
According to a press release from the ASC, Director Joseph Borg announced Wednesday that he has issued a so-called “show cause” order requiring cryptocurrency BlockFi to explain “why they should not be directed to cease and desist from selling unregistered securities in Alabama.”
BlockFi, which is based in New Jersey, sells interest-earning cryptocurrency accounts called BlockFi Interest Accounts (BIAs). According to the ASC, the company has raised at least $14.7 billion through the sale of these BIAs, which the regulatory agency is in part due to “the sale of unregistered securities in violation of the Securities Law.”
“There are thousands of entities registered with the ASC, as required by law, to sell securities to the people of Alabama,” ASC Director Borg said in a press release. “Most of those registered to sell securities live outside of Alabama, but anyone offering securities must be registered before making an investment offer to an Alabama resident.”
The “show cause” order issued by the ASC accuses BlockFi of advertising itself as a “US regulated entity” despite its failure to register with the agency or any other securities regulator.
BlockFi has 28 days to respond to the order.