Vermont has become the fourth jurisdiction in the US to issue an order against crypto lending firm BlockFi.
According to Vermont, the firm has been involved in offering unregistered securities.
Details are still subject to release by the state's financial regulator but BlockFi has already complied with a request by authorities, and notified customers accessing the website from Vermont about the ongoing proceedings.
Vermont is not the first state to pursue regulatory action against BlockFi, which has found itself beleaguered in New Jersey, Alabama and Texas in the course of just several weeks.
Investigations have been brought against two subsidiaries, BlockFi Trading and BlockFi Lending.
According to investigators, the platform's interest accounts amount to unregistered securities as they constitute investment contracts under US law. In any instance that someone is selling investment contracts they must register to do so, which is why BlockFi is taking greater regulatory heat.
Regulators specify that when BlockFi customers invest, they expect to earn interest rate which constitutes profit. However, BlockFi disagrees with this interpretation of the law and argues that the BlockFi Interest Account is not a security.
BlockFi has faced similar interpretations of the law in other jurisdictions as well. Currently, the company operates $15bn worth of assets based on a Texas State Securities Board notice, one of the regulators to pursue a regulatory action against the platform.