Celsius has been brought to book for allegedly offering unregistered securities to residents of the state of Texas, and is expected to offer reasons why it should be allowed to continue offering its products in the state.

Celsius, crypto lender and major player in the DeFi space, has come under fire from regulatory authorities in the states of Texas, Alabama, and New Jersey. On Friday, 17 September 2021, Texan authorities ordered Celsius to cease operations and provide evidence as to why the company should be allowed to continue providing its services to the state of Texas. In Alabama, only certain products were deemed as unfit, and Celsius was ordered to stop offering these products before November 1. 

BlockFi also experienced similar backlash from Texas, Alabama and Vermont regulators. Vermont regulators flagged BlockFi Interest Accounts, questioning their legality and status, while New Jersey authorities determined that these accounts were unregistered securities. 

Coinbase has felt regulatory heat recently, and faces an SEC lawsuit should it look to proceed with its Lend product, which is looking to operate in the same space as BlockFi. BlockFi’s restrictions were limited to the prohibition of new accounts, and BlockFi customers who used BlockFi before the regulatory impact have not been affected.

Offering unregistered securities is the primary reason for the investigation of Celsius.

Celsius’ operations fall under the broad categorization of decentralized finance, or ”DeFi”, although it does combine aspects of both centralized and decentralized finance. Celsius essentially operates as a bank for digital assets. It allows users to deposit their  cryptocurrencies, and offers interest on the deposit. It uses deposits to lend, and profits from the interest borrowers must pay. Interest is typically paid out as percentage yields of the original cryptocurrency, or in CEL.Deposits of stablecoins can earn up to 12.5% Annual Percentage Yield.  Celsius holds over $24B in community assets, and is considered one of the largest lenders in the crypto-lending space.  

In a recent interview, a Celsius representative has voiced vehement disagreement on the rulings by state regulators, claiming that the company is complicit with the law. This echoes a similar sentiment voiced by the CEO of BlockFi after the Vermont allegations, stating the company’s adamance that their interest-bearing accounts are not securities, and hence should not be prevented from serving state residents.

What do you think about this subject? Write to us and tell us!

The post Celsius to Undergo Hearing in Texas Due to Unregulated Securities appeared first on BeInCrypto.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

230 +