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 ordered Celsius to appear at a hearing and is also threatening with a cease and desist. Regulators are not taking too kindly to platforms that offer high-yield interest rates on various 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 recent times, Blockfi had issues 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 newly published cease and desist order from New Jersey Bureau of Securities (NJBOS) chief Christopher Gerold is targeting the cryptocurrency lending 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 portal details. 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 cease and desist order stresses. Therefore, these accounts Celsius offers are “not protected by the Securities Investor Protection Corporation (SIPC).” The order adds:
[A] lack of a protective scheme or regulatory oversight subjects Celsius investors to additional risks not borne by investors who maintain assets with most SIPC-member broker-dealers, banks and savings associations, and credit unions.
According to the NJBOS filing, Celsius must stop soliciting New Jersey customers 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 given Celsius a hearing date that’s much further away and will be held on February 14, 2022.
What do you think about the Celsius cease and desist order stemming from the New Jersey Bureau of Securities? What do you think about the company’s problems with Texas? Let us know what you think about this subject in the comments section below.