Breaking: Celsius Served With Desist And Refrain Order

Celsius Network, a cryptocurrency lender which filed bankruptcy last month has now landed into another trouble. Department of Financial Protection and Innovation (DFPI) issued an order against the lending platform and its CEO, Alex Mashinsky.

Celsius tricked Crypto investors

According to DFPI, Celsius Network and its CEO misrepresented and omitted the material in the offer to their crypto investors. Specifically, the lender deceived the investors over the risk of depositing digital assets.

The order mentions that Celsius represented gives 80 percent of its revenue to the customers. It added that investors were entitled to the rates fixed by the lending platform.

DFPI regulates and licenses financial services. It also includes state chartered banks, credit unions, mortgage lenders, and more.

The agency discovered that Celsius provided accounts that permitted the users to earn interest on their digital assets after depositing them on the platform. However, it did not qualify those accounts as securities in accordance with California law.

As per the filings, the securities were offered and sold in the issuer transactions. Meanwhile, the department hasn’t provided any permit or qualification to offer or sell them in the state. It adds that any sale transaction of these securities to the public is exempt before April 14, 2022.

Crypto lenders under the govt radar

The digital asset lending platform halted the customer withdrawals from the interest accounts on June 25, 2022. Celsius went on to file for Chapter 11 bankruptcy on July 13. This was in continuation of the crypto market crash that erupted due historic collapse of the TerraUSD.

Meanwhile, many state securities regulators have launched an investigation into this matter. DFPI mentioned that it is investigating many such matters in the country.

On the market side, the Celsius token has surged by more than 110% over the past 30 days. CEL is trading at an average price of $1.89, at the press time. Its 24 hour trading volume has jumped by more than 115% to stand at $22.8 million.