BTC lender Celsius denies that the New York Attorney General handed them a cease and desist order while the platform indeed has been targeted by several state securities regulators as we reported in our crypto news earlier.
the BTC Lender Celsius denies receiving a cease and desist order from the NYAG Letitia James one day after she directed two crypto lenders to stop their operations in 10 days and even requested three more to provide information by November 1st. The crypto lender wrote in a Medium post:
“Celsius has received a request for information (and not a cease and desist) from NY authorities.”
NYAG Letitia James, Source: WKBN News
In a press release yesterday, the New York Attorney General’s office aimed at several crypto companies that didn’t register their securities offerings under the New York Martin Act, and the press release was also accompanied by two cease and desist letters with more information about the companies that remained redacted. However, one letter was named NEXO and the other Celsius strongly suggests that these lenders were being asked to shut down operations. Nexo on the other hand confirmed receiving the order but called it a “mix up.”
“Nexo is not offering its Earn Product and Exchange in New York, so it makes little sense to be receiving a cease and desist order for something we are not offering in New York anyway.”
Celsius just finished a $400 million funding round after getting valued at more than $3 billion which despite the cease and desist order from state securities regulators in Kentucky, Alabama, Texas, and New Jersey, we can see that it wasn’t the only platform that got it. BLockFi was hit as well. The startup uses the slogan “Unbank yourself” and allows people to earn interest on the crypto they hold as it advertises up to 17% annual return through the rates depending on the asset. In addition to mainstays like ETH and BTC users can deposit Celsius tokens, stablecoins, and other assets. Celsius lends those coins that give the depositors a share of their action.
The yield products like these are classified as securities on a federal and state level as the NYAG explained though this doesn’t mean that the companies will go down without a fight. Coinbase was planning its LEND product which suggests that it will be willing to go to court if needed but then the SEC threatened with a lawsuit and coinbase dropped the product. According to the NYAG letter requesting information, the office wants to know all company info, names, subsidies, and headquarters and it wants product descriptions with explanations on how the digital assets are loaned out or custodied.