In Brief:
- A number of state securities agencies are investigating Celsius.
- New York’s Attorney General is now making enquiries as well.
- Celsius denies receiving the Cease and Desist letter from NY AG.
A day after New York Attorney General Letitia James ordered two unnamed crypto lenders to suspend operations in the Empire State within 10 days and wanted information from three more by November 1, Celsius has denied receiving a cease-and-desist letter.
“Celsius has received a request for information (and not a cease and desist) from NY authorities,” as per its report.
The New York Attorney General’s Office issued a press statement yesterday targeting crypto firms that have not registered securities offerings under New York’s Martin Act.
Two cease-and-desist letters were sent with the press release, with identifying information about the companies removed. The files were labelled “Nexo Letter” and “Celsius Letter” by the NYAG, implying that these were the two crypto lenders being ordered to close down.
Nexo, a competitor of Celsius, confirmed receipt of the order yesterday, but labelled it a “mix up.” It further promised to “contact the New York Attorney General and seek clarity.”
After being valued at more than $3 billion, Celsius recently received a $400 million investment round. State securities regulators in Alabama, Kentucky, New Jersey, and Texas all have issued cease-and-desist or show-cause orders against crypto lender BlockFi.
“Unbank Yourself” is the company’s slogan, and it allows customers to profit from their cryptocurrency holdings. It can provide yearly returns of up to 17%, though rates vary depending on the asset.
In addition to the usual suspects like Bitcoin and Ethereum, users can deposit native Celsius tokens, stablecoins, and a number of other crypto assets. The coins are then lent out, with depositors receiving a portion of the proceeds.
The office wants to know firm information, including legal names, subsidiaries, and headquarters, according to the NYAG letter requesting information. It also wants product descriptions and details on how digital assets are stored, pooled, and lent out.
“Celsius is working closely with US states to provide clarity about our business operations,” Celsius stated. “We expect additional US states to reach out to Celsius requesting information”.
