The news comes against amid a campaign by U.S. state and federal regulators to closely scrutinize or clamp down on crypto lending platforms. Five state regulators have moved to take similar action against BlockFi, one of Celsius’s main rivals.
In its order concerning Celsius’s accounts, which promise high-interest rates but without the protections of regulated bank accounts, the Kentucky Department of Financial Institutions said that the product exposes consumers to “unprecedented risks.”
The regulator also stated that Celsius is, in its view, “offering securities in the form of investment contracts in exchange for the deposit of assets with the company.”
Leading crypto exchange Coinbase recently ditched its plan to roll out a lending product after a very public tussle with the Securities and Exchange Commission. The SEC is said to have expressed the view that the product would fall under the definition of a security.
Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction.
Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.