Information text

Your Location:Home>News>Main body

Celsius Investigated by Regulators in Four Different States

WikiBit 2022-06-17 12:16

Abstract:Celsius is being investigated by state securities regulators from Texas, Alabama, Kentucky and New Jersey following its decision to halt customer withdrawals.

  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.

  For more blockchain news, please download WikiBit- the Global Blockchain Regulatory Inquiry APP.

Token conversion
Exchange rate conversion
Calculation for foreign exchange purchasing
/

Current Rate0

Available

-

Calculate