A news release published by the New Jersey government web portal indicates that the cryptocurrency lending platform Celsius has been sent a cease and desist order from the New Jersey Bureau of Securities. Furthermore, the Texas State Securities Board has actually bought Celsius to appear at a hearing and is likewise threatening with a stop and desist. Regulators are not taking too kindly to platforms that provide high-yield rate of interest on numerous cryptocurrencies.
New Jersey Regulators Send Cease & Desist to Celsius Over ‘Earn Rewards Accounts’
U.S. regulators from the Securities and Exchange Commission (SEC), politicians, and securities watchdogs from single states have targeted centralized exchanges, decentralized finance (defi), and more specifically platforms that offer yields.
In current times, Blockfi had problems with regulators in New Jersey and Vermont, Texas, Alabama, and Kentucky. The state watchdogs had problems with the firm’s Blockfi Interest Accounts (BIA). Even Coinbase CEO Brian Armstrong had words to say about the SEC threatening to sue the Nasdaq-listed firm.
Now a freshly released stop and desist order from New Jersey Bureau of Securities (NJBOS) chief Christopher Gerold is targeting the cryptocurrency loaning platform Celsius. Similar to Blockfi, the Celsius Network says that it offers up to 13% APY on cryptocurrency assets.
NJBOS Gives Celsius Until October, Texas Hearing Scheduled for February 2022
“Put your crypto to work and earn on your coins, paid out every Monday,” the web website information. Similar to the complaints filed with Blockfi, Gerold and the NJBOS say the “order is to protect the investing public.”
“The Celsius Earn Rewards accounts are not registered with the Bureau or any other securities regulatory authority,” the stop and desist order tensions. Therefore, these accounts Celsius offers are “not protected by the Securities Investor Protection Corporation (SIPC).” The order adds:
[A] absence of a protective plan or regulative oversight topics Celsius financiers to extra dangers not borne by financiers who keep possessions with many SIPC-member broker-dealers, banks and savings associations, and credit unions.
According to the NJBOS filing, Celsius should stop getting New Jersey clients by October. In the order stemming from the Texas State Securities Board (TSSB) the regulator says the firm is “not licensed as a Money Service Business in Texas.” The Celsius Earn Accounts are “also not protected by Securities Investor Protection Corporation, otherwise known as the SIPC.” Interestingly, Texas has actually provided Celsius a hearing date that’s much even more away and will be hung on February 14, 2022.
