MyConstant Is Required To Stop Offering Crypto Loans By California Regulations

Key Points:

• MyConstant has been ordered to stop selling a variety of its cryptocurrency-related products by the California Department of Financial Protection and Innovation (DFPI) due to alleged violations of state securities law
• MyConstant engaged in “unlicensed loan brokering” by encouraging lenders to make loans without the necessary authorizations
• MyConstant is “not licensed” by DFPI to conduct business in California, DFPI first revealed it was looking into MyConstant

The crypto lending platform MyConstant has been ordered to stop selling a variety of its cryptocurrency-related products by the California Department of Financial Protection and Innovation (DFPI) due to alleged violations of state securities law.

According to a press release from the DFPI published on December 21, MyConstant has been told to “desist and refrain” from providing its peer-to-peer loan brokering service and interest-bearing crypto asset accounts, both of which it claims violate the California Securities Law and California Consumer Financial Protection Law.

The DPFI claimed that MyConstant had broken one of the state’s financial rules by providing and marketing its peer-to-peer lending business, “Loan Matching Service.”

Additionally, it claimed that MyConstant engaged in “unlicensed loan brokering” by encouraging lenders to make loans without the necessary authorizations.

The fixed interest-beating crypto asset products offered by the cryptocurrency lender, which required customers to deposit crypto assets (such as stablecoins and fiat) in exchange for a guaranteed fixed annual percentage interest return, were also problematic in the eyes of the regulators.

MyConstant issued and sold non-exempt, unqualified securities

The regulator announced in July that it was looking into a number of providers of cryptocurrency interest accounts to see if they were “violating regulations under the Department’s jurisdiction.”

In a press release dated Dec. 5 that claimed MyConstant is “not licensed” by DFPI to conduct business in California, DFPI first revealed it was looking into MyConstant.

The company, which is situated in California, appeared to be in financial trouble just a month prior to the recent action, claiming on November 17 that “rapidly deteriorating market circumstances” had led to significant withdrawals and that it was “unable to continue to conduct our business as usual.”

At the moment, the site also stated: “No deposit or investment request will be accepted at this time.” It also stated that it had limited its commercial activity and had paused withdrawals.

In a press release dated Dec. 5 that claimed MyConstant is “not licensed” by DFPI to conduct business in California, DFPI first revealed it was looking into MyConstant.

The company, which is situated in California, appeared to be in financial trouble just a month prior to the recent action, claiming on November 17 that “rapidly deteriorating market circumstances” had led to significant withdrawals and that it was “unable to continue to conduct our business as usual.”

At the moment, the site also stated: “No deposit or investment request will be accepted at this time.” It also stated that it had limited its commercial activity and had paused withdrawals.

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