Texas, New Jersey, Alabama, And Other US States Have Initiated An Investigation Into Celsius Network.
A number of states in the United States, including Texas and Alabama, are investigating Celsius Network’s decision to suspend client withdrawals.
Several US jurisdictions, including Texas, New Jersey, and Alabama, are looking into Celsius Network’s (CEL) decision to ban consumer withdrawals.
The cryptocurrency lending platform said in a blog post that it would temporarily suspend withdrawals and its swap and transfer products on June 12, citing “extreme market circumstances.” Celsius stated that doing so will put them “in a better position to honor its withdrawal obligations over time.”
Rumors that the firm was poised to go bankrupt spread swiftly on social media, causing massive market sell-offs.
Alabama Securities Commission Director Joseph Borg acknowledged that his agency, along with those of Texas, New Jersey, and Kentucky, is investigating the case.
He noted that, despite the fact that the investigation is still in its early stages, Celsius has answered to the inspectors’ inquiries. Borg went on to claim that the Securities and Exchange Commission of the United States had also contacted Celsius.
Authorities in Kentucky, New Jersey, and Texas issued a cease and desist order to Celsius in September. According to the officials, the company’s interest-bearing goods must be registered as securities.
BlockFi was fined $100 million by the SEC and state regulators in February for failing to register its cryptocurrency lending services.
Celsius functions similarly to a bank in that it accepts cryptocurrency deposits from retail consumers and invests those funds in a market similar to the wholesale cryptocurrency market.
These investments could be made in “decentralized finance,” or “Defi,” which refers to websites that use blockchain technology to provide services like loans and insurance outside of the traditional financial industry.
Earlier this month, Celsius pumped over 500% in 5 minutes due to liquidity concerns. The corporation also employed restructuring lawyers to assist them with their earlier liquidity issues this week.
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