Celsius Investigated by Regulators in Four Different States

0
13
Celsius Investigated by Regulators in Four Different States

The SEC has reportedly gotten involved as the company struggles to remain solvent.

Key Takeaways

  • Celsius is being investigated by state securities regulators from Texas, Alabama, Kentucky and New Jersey following its decision to halt customer withdrawals.
  • The company has been communicating with regulators.
  • Celsius is facing liquidity problems after last week’s brutal market downturn.

Crypto lender Celsius is faced with an investigation from regulators from four different states for freezing customer accounts over solvency concerns.

Multiple State Regulators Investigating Celsius

Regulators have launched an investigation into Celsius over its decision to halt customer fund withdrawals.

According to Reuters, state securities regulators from Alabama, Kentucky, and New Jersey are joining the Texas State Security Board in its probe into crypto lending company Celsius’ recent activity. Texas Director of Enforcement Joseph Rotunda said that regulators “began investigating the freezing of accounts first thing on Monday morning” and that he considered the probe a “priority.” 

Furthermore, Alabama Securities Commission Director Joseph Borg told Reuters that the Securities and Exchange Commission was also in communication with Celsius and that the company had been responsive to regulators’ questions so far.

Celsius Facing Solvency Issues

Celsius is a crypto lending platform that offers its customers up to 18% returns on crypto assets such as Bitcoin and Ethereum. It does so by taking advantage of the enhanced yields commonly found in decentralized finance (DeFi) protocols while acting as a centralized custodian for its clients.

The company announced on Monday that it would pause customer withdrawals, swaps, and transfers in order to protect its solvency and put itself “in a better position to honor, over time, its withdrawal obligations.”

“I am very concerned that clients—including many retail investors—may need to immediately access their assets yet are unable to withdraw from their accounts,” Rotunda commented. “The inability to access their investment may result in significant financial consequences.”

News of the investigation came alongside reports that the investors who had previously led a Series B funding round for Celsius were unlikely to bail out the struggling company. The Series B round had raised $750 million and valued the crypto startup at more than $3 billion. Meanwhile, rival crypto lender Nexo has expressed interest in buying out Celsius’ collateralized loan assets to make its customers whole again.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Celsius Has Paused Customer Withdrawals

The development follows weeks of rumors that the crypto lender could face insolvency issues due to the decline in the crypto market.  Celsius Customers Blocked From Accessing Funds  Celsius appears…

Celsius Has Paused Customer Withdrawals

After Celsius, Binance Temporarily Halts Bitcoin Withdrawals

News

The world’s largest crypto exchange, Binance, seems to have further exacerbated the market panic triggered by Celsius’ liquidity fiasco by temporarily suspending Bitcoin withdrawals over an alleged “stuck transaction.” Binance…

After Celsius, Binance Temporarily Halts Bitcoin Withdrawals

Nexo Circles Celsius for Potential Loan Asset Buyout

The crypto lender Nexo has sent an official letter of intent to Celsius, offering to buy some or all of its collateralized loan assets to secure sufficient liquidity for its…

Nexo Circles Celsius for Potential Loan Asset Buyout

Read More

LEAVE A REPLY

Please enter your comment!
Please enter your name here