Representatives of the agencies identified the situation with the freezing of DeFi platform customers’ funds as a priority to be investigated

Regulators in five US states launched investigation into Celsius

17.06.2022 - 11:05

970

2 min

What’s new? On June 13, state securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington launched an investigation into the suspension of customer withdrawals by Celsius, a DeFi lending platform. The Texas agency added that it considered investigating this situation a priority because the lack of users’ ability to get instant access to their assets may lead to “significant financial consequences,” Reuters reports.

Material by Reuters

Details of the Celsius situation. On June 13, Celsius suspended withdrawals, exchanges, and transfers between accounts citing “extreme market conditions.” On the same day, crypto lender Nexo announced its intention to buy Celsius’s assets, primarily their collateralized loan portfolio. Celsius later hired experts from the financial conglomerate Citigroup to advise on finding new sources of financing, as well as lawyers from Akin Gump to conduct restructuring.

The Alabama Securities Commission noted that Celsius is responding to regulatory requests, but that the investigation is still in the initial stage. The US Federal Securities and Exchange Commission (SEC) has also reportedly contacted representatives of the platform, but the agency declined to comment to reporters.

In September, regulators in Kentucky, New Jersey, and Texas issued a cease-and-desist order to Celsius, arguing that its investment products must be registered as securities. In February, the SEC and regulators of the same states fined BlockFi $100 million for failing to register its crypto lending product.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy