Celsius Investigated by Regulators in Four Different States

Celsius Investigated by Regulators in Four Different States

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State securities regulators in Texas, Alabama, Kentucky and New Jersey are investigating Celsius after deciding to halt customer withdrawals. The company has been communicating with regulators. Celsius is facing liquidity problems after last week’s brutal market downturn.

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Cryptocurrency lender Celsius is facing investigations from regulators in four different states for freezing customer accounts over solvency issues.

Multiple state regulators investigate Celsius

The regulator has launched an investigation into its decision to halt customer withdrawals.

according to Reuters, state securities regulators from Alabama, Kentucky, and New Jersey are joining the Texas State Safety Commission to investigate recent activities by crypto lending firm Celsius. Texas law enforcement director Joseph Rotunda said the regulator “first began investigating the freezing of accounts Monday morning” and he considered the investigation a “priority.”


In addition, Alabama Securities Commission Director Joseph Borg told Reuters that the SEC is also in communication with Celsius, and the company has so far been responding to the regulator’s questions.

Celsius faces solvency issues

Celsius is a crypto lending platform that offers clients up to 18% returns on crypto assets like Bitcoin and Ethereum. It does this by taking advantage of the high yields commonly found in decentralized finance (DeFi) protocols, while acting as a centralized custodian for its clients.

company Announce On Monday, it will suspend customer withdrawals, swaps and transfers to protect its solvency and allow itself to “better meet its withdrawal obligations over time.”

“I am very concerned that clients – including many retail investors – may need immediate access to their assets, but not be able to withdraw funds from their accounts,” Rotunda commented. “The inability to obtain their investment could have significant financial consequences.”

News of the investigation followed Report Investors who previously led a Series B round for Celsius are unlikely to bail out the struggling company. The Series B round has raised $750 million, valuing the cryptocurrency startup at over $3 billion. Meanwhile, rival cryptocurrency lender Nexo has expressed interest in buying Celsius’ mortgage assets to make its clients whole again.

Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.

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