Kentucky regulator orders Celsius to stop offering crypto accounts

Sep 24, 2021 | The Block News | 0 comments


Crypto lending company Celsius has been ordered to stop offering interest-bearing accounts in the U.S. state of Kentucky.

The state’s securities regulator issued an emergency cease and desist notice on September 24, becoming the fourth state regulator to take action against Celsius in recent days.

Regulators in New Jersey and Texas moved against the crypto firm on September 17, with New Jersey similarly filing a cease and desist. The Alabama Securities Commission had launched a day before.

The news comes against amid a campaign by U.S. state and federal regulators to closely scrutinize or clamp down on crypto lending platforms. Five state regulators have moved to take similar action against BlockFi, one of Celsius’s main rivals.

In its order concerning Celsius’s accounts, which promise high-interest rates but without the protections of regulated bank accounts, the Kentucky Department of Financial Institutions said that the product exposes consumers to “unprecedented risks.”

The regulator also stated that Celsius is, in its view, “offering securities in the form of investment contracts in exchange for the deposit of assets with the company.”

Leading crypto exchange Coinbase recently ditched its plan to roll out a lending product after a very public tussle with the Securities and Exchange Commission. The SEC is said to have expressed the view that the product would fall under the definition of a security.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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