Numerous US state regulators are suing the popular cryptocurrency lender Celsius Network, accusing it of not complying with local securities laws.
The CEO of the project quickly refuted the claims, promising that all protocols services would remain unchanged for the time being.
US State Regulators After Celsius
The latest example of this was made public by the United States State Securities Board on Friday. First, the Texas State Securities Board requested a hearing to determine whether a cease-and-desist order could be issued against Celsius.
The regulator claimed that the lender has provided unlicensed securities for years. A hearing will be held on February 14th, 2022 before an Administrative Law Judge. If the Judge accepts the allegations of the watchdog, Celsius will likely be forced to cease offering cryptocurrency services in the State without the required license.
The New Jersey Bureau of Securities quickly took the clampdown to a new level by “taking actions to protect investors from the sales of unregistered securities, in the form of interest earning cryptocurrency products.” It ordered the firm that sells digital assets to stop offering or selling these products.
This statement justifies the cease and desist order by claiming Celsius had funded its cryptocurrency lending operations as well as proprietary trading “at minimum in part through the sale unregistered securities, in violation of New Jersey Securities Law.” According to the statement, Celsius has raised $14 billion from these “unlawful sales.”
“Financial firms that are involved in the cryptocurrency market must be notified. New Jersey’s investor protection laws must be followed if you are selling securities. Companies that deal in cryptocurrency are subject to oversight.” – Andrew J. Bruck, Acting Attorney General.
Notable is the fact that BlockFi was also subject to New Jersey’s regulatory scrutiny. CryptoPotato reported that the local watchdog had ordered BlockFi to cease accepting new customers beginning July 22nd.
Celsius CEO Says There Is No Such Thing
Alex Mashinsky is the CEO of the cryptocurrency lending firm. He took to Twitter to express his opinion on the regulatory actions. They were described as disappointing by Mashinsky, who also stated that Celsius “wholeheartedly disagrees with” the claims that the company failed to follow the law.
2. We have worked with regulators worldwide and in the USA to ensure that we operate in compliance with all laws. We are committed to regulatory compliance and look forward to solving this problem quickly.
— Alex Mashinsky (c) (@Mashinsky) September 17, 2021
Mashinsky stated that Celius had “always” cooperated with US regulators. He also said that customers would continue to be able use all services as they are.
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