The securities regulators in five U.S. states have, on a priority basis, begun examining Celsius’s suspension of customers’ withdrawals on the crypto-lending platform. Reuters reports.
The information about the investigation was disclosed by Joseph Rotonda, the Texas State Securities Board’s Director of Enforcement. He said the firm’s activities have been ‘under scrutiny’ for almost a year.
“I am extremely concerned that clients may need immediate access to their assets, but they cannot withdraw their funds. The lack of such access could lead to significant financial consequences.”, Rotonda said.
Similar steps were taken by regulators in Kentucky, New Jersey, Washington state and Alabama. Joseph Borg, director of the Alabama Securities Commission, said.
“We have been working with Celsius for some time. We have requested a lot more information. We will decide whether the model for settling claims against BlockFi applies or not,” said the official in an interview with CoinDesk.
In January 2022, media reported on a U.S. Securities and Exchange Commission investigation into lending-service providers Voyager, Gemini and Celsius Network. The regulator was reportedly interested in the legality of offering interest on deposits in digital assets.
On June 13, Celsius paused withdrawals, exchanges and transfers between accounts ‘due to extreme market conditions’. However, analysts suggested the real reason was a liquidity crisis, causing the company to be unable to make payouts to customers.
On June 15, The Wall Street Journal reported that Celsius hired lawyers from the firm Akin Gump Strauss Hauer & Feld for possible financial restructuring.
Journalists stressed that the platform’s initial aim was to attract capital from investors. According to The Block, to solve this task the company turned to the financial conglomerate Citigroup.
Earlier, called Celsius’s bankruptcy almost inevitable.
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