State regulators in New Jersey and Texas have targeted the Celsius Network following recent accusations of bond trading leveled at crypto firm BlockFi.
The Texas Treasury has called officials of Celsius Network to a lawsuit, which a ceasefire order will follow. The cause for this was a charge of trading unregistered bonds as part of a digital currency interest-earning product offering. In either a traditional or online format, the case will be heard in Texas on February 14, 2022. If the decision is taken to close the Celsius business in the state, the Celsius Lending and Celsius US Holding divisions will merge with the main enterprise.
According to the state regulator, the firm’s crypto holdings have increased by 2,300 percent by early summer 2020. After that, representatives from Celsius revealed that they would be storing crypto assets for $1 billion. As a result, the company owns about $24 billion as of September 3, 2021, making it one of the largest players in the DeFi market. As of June 9, 2021, the firm had raised approximately $340 million in assets from 9,000 Texans.
Soon after, the New Jersey Securities Bureau joined the Texas regulator in announcing that the Celsius Network was distributing $14 billion in unregistered bonds to customers. As a result, Crypto firms are now under the scrutiny of American regulators, according to the state attorney general, and if they offer securities, they must ensure that they do not break the laws of the states in which they operate.
Following the allegations, Celsius CEO Alex Mashinsky stated that the company is willing to work with regulators, stating that the company would be delighted to “explain them what it is doing and train them to comprehend the products offered by Celsius.” He also told users he was “literally pouring money on them” during the Ask Me About Anything session, equating Celsius’s $50 referral bonus for new subscribers to marketing businesses BlockFi and FTX.
The company’s CEO does not appear to be very bothered by the regulators’ charges, so he is unlikely to pass up the opportunity to speak with them, albeit in court.