Kentucky regulator accuses Celsius Network of securities-law violations

The Kentucky Department of Financial Institutions has accused the Celsius Network cryptocurrency-lending service of selling unregistered securities.

According to the regulator’s order, Celsius Network’s offerings violate the state’s securities laws. The service did not disclose to customers what was happening with their deposits, the department said.

The company may request an expedited hearing to challenge the decision, or appeal it in court.

Earlier, regulators in Alabama, Texas and New Jersey filed similar claims against Celsius Network. The company’s founder, Alex Mashinsky, described the authorities’ actions ‘disappointing.’ He said the company does not agree with the statements about violations of law.

As a reminder, regulators in Vermont, New Jersey and Alabama will review the legality of the BlockFi crypto-lending platform’s savings accounts offering.

The company’s chief executive Zac Prince expressed confidence that crypto-lending services will survive despite regulatory pressure at the state level.

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