The US Securities and Exchange Commission (SEC) and several state regulators are reportedly investigating crypto lender Celsius Network’s decision to freeze payouts.
US Securities and Exchange Commissions Investigate Celsius Withdrawal Ban
The U.S. Securities and Exchange Commission and securities regulators in Alabama, Kentucky, New Jersey, Texas and Washington are investigating crypto lender Celsius Network’s decision to freeze withdrawals, Reuters reported Thursday.
Texas director of enforcement Joseph Rotunda said officials from the five state securities commissions met Monday morning to begin the investigation after Celsius announced a payout freeze Sunday night.
Noting that the investigation was a “priority,” Rotunda said:
I am very concerned that clients – including many retail investors – may need to access their assets immediately but not be able to withdraw from their accounts.
“The inability to access their investments can lead to significant financial consequences,” he stressed.
Rotunda said he and his team learned of Celsius’ accounts freeze through the company’s tweet and blog post Sunday night.
“Due to extreme market conditions, we are announcing today that Celsius is pausing all withdrawals, exchanges and transfers between accounts,” the company wrote.
Alabama Securities Commission director Joseph Borg told the publication that the SEC has also communicated with Celsius, adding that the crypto lender has responded to questions from regulators.
Last year, regulators in a number of states, including Alabama, Kentucky, New Jersey and Texas, issued Celsius cease-and-desist orders on the lender’s interest-bearing products that they believe should be registered as collateral.
After freezing payouts, Celsius reportedly sought help from Akin Gump Strauss Hauer & Feld, a law firm specializing in financial restructuring. The crypto lender is also reportedly hiring Citigroup as an advisor.
Additionally, Ben Armstrong, aka Bit Boy, announced a class action lawsuit against Celsius and CEO Alex Mashinsky via Twitter on Wednesday.
What do you think of US securities regulators investigating the Celsius account freeze? Let us know in the comment section below.
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