Celsius, over one million-strong community users earning up to 17% on their crypto. Users receive payment weekly and borrow at 1%. One may borrow and transfer coins for free. Moreover, it is available across Web and mobile applications.
According to a press release, the New Jersey Bureau of Securities has issued a stop and desist order to cryptocurrency loan platform Celsius. Followed by the Texas State Securities Board (TSSB).
The Securities and Exchange Commission (SEC), politicians, and state securities watchdogs have attacked centralized exchanges, decentralized finance (DeFi), and particularly yield-based platforms.
Regulators in New Jersey, Vermont, Texas, Alabama, and Kentucky recently criticized Blockfi. Furthermore, the state regulators have issues with Blockfi Interest Accounts (BIA).
Coinbase Must Reconsider Its Future Plans
Celsius must cease recruiting New Jersey consumers by October, according to the NJBOS. The Texas State Securities Board (TSSB) ordered the company for ceasing operation as it is not licensed as a Money Service Business in Texas. It also ordered Celsius to appear at a hearing and issued a stop and desist letter.
The Celsius Earn Accounts are likewise not covered by SIPC (Securities Investor Protection Corporation). Interestingly, Texas has set a hearing date for Celsius for February 14, 2022.
Coinbase, the only publicly listed cryptocurrency exchange in the US, has long been working on a product to compete with BlockFi and Celsius. Although, it may need to reconsider. Its upcoming Lend program would have paid stablecoin holders 4% interest on their deposits.
Also, with plans to extend to other cryptocurrencies in the future. Moreover, the exchange claims the SEC considered it security and threatened legal action, but the agency refused to explain why. The SEC threatening to sue Coinbase prompted a response from CEO Brian Armstrong.