Former CFTC Chair Giancarlo Steps Down from BlockFi Board as States Crack Down on Firms

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Christopher Giancarlo joined the BlockFi board of directors four months ago, before the company was struck with a slew of cease and desist orders.

Christopher Giancarlo, who oversaw the US Commodity Futures Trading Commission (CFTC) from 2017 to 2019 as part of a five-year term as commissioner, is stepping down from the board of BlockFi.

A press release from the company today said that Ellen-Blair Chube, managing director of the William Blair financial services company, will replace him. Giancarlo “will continue to provide strategic counsel to the firm in an advisory role,” the release noted.

“The best is yet to come for BlockFi and I know that as crypto assets take a more prominent role in both retail and institutional investors’ strategies, BlockFi will be there to lead the way,” Giancarlo said in a statement.

State securities regulators have recently chastised BlockFi, ordering it to stop distributing its hallmark BlockFi Interest Accounts to residents in four states.

Giancarlo, dubbed “Crypto Dad” for his approachable attitude towards digital assets, joined the BlockFi board in April, when the fast-growing firm was riding high on Bitcoin’s bull run. The startup, which pays interest on cryptocurrency deposits and makes loans, raised $350 million in Series D funding in March and was valued at $3 billion.

See also  Vermont is the fourth state to sign up for BlockFi's Bitcoin Savings Accounts.

At the same time, other former regulators and politicians were jumping on the crypto bandwagon. U.S. Senator Max Baucus has joined Binance as an advisor. Jim Messina and Lane Kasselman from the Obama and Clinton campaigns collaborated with wallet provider and exchange Blockchain. Acting Comptroller of the Currency Brian Brooks left for a brief stint as CEO of Binance. CEO of the United States

Like Brooks, who abruptly quit after only three months on the job, Giancarlo is leaving without much explanation. However, in both cases, the regulatory environment could be to blame. Brooks was apparently planning to put additional distance between Binance US and Binance, which has had a rocky relationship with global and US regulators, only to have his proposal rejected. by Binance CEO Changpeng Zhao.

BlockFi is also battling fires. On July 20, the attorney general of New Jersey charged it with breaking securities laws in connection with its BlockFi Interest Accounts (BIA), which provide users with a return on their crypto investments. It directed the corporation to discontinue serving new BIA clients in the state.

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Although New Jersey has postponed the order, first to September 2 and now to September 30, other states have joined in. Alabama issued a show-cause notice, indicating that it is prepared to file a cease and desist order unless BlockFi can demonstrate that it is not selling unregistered securities in the state. Securities are tradable assets used as financial instruments; they must be registered with securities regulators at the federal and state levels.

Texas, Vermont, and Kentucky have also filed cease and desist orders, forcing BlockFi to discontinue supplying BIAs in their respective states.

 

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