US state regulator says it thinks crypto lender Celsius is ‘deeply insolvent’

The Celsius network logo and representations of cryptocurrencies are seen in this illustration taken June 13, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

July 12 (Reuters) – Vermont’s Department of Financial Regulation (DFR) said on Tuesday it believed cryptocurrency lender Celsius Network was “deeply insolvent” and lacked the assets and cash to meet its obligations. obligations to customers and other creditors.

The crypto lender was involved in an unregistered securities offering, selling cryptocurrency interest accounts to retail investors, including Vermont investors, it said in a statement. https://bit.ly/3AHkrdZ

Celsius also does not have a money transfer license and until recently operated largely without regulatory oversight, he said.

“Due to its inability to register its interest accounts as securities, Celsius clients have not received critical information about its financial condition, investment activities, risk factors and ability to repay its obligations to depositors and other creditors,” the regulator said.

Celsius did not immediately respond to Reuters’ request for comment.

The state agency said it has now joined a multi-state investigation into Celsius.

Securities regulators in the states of Alabama, Kentucky, New Jersey, Texas and Washington are investigating Celsius’ decision to suspend client redemptions. Read more

Last month, Celsius froze withdrawals and transfers, citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets. Read more

The retail crypto lending platform later said it was exploring options including deals and restructuring its liabilities. Read more

Several crypto companies have struggled after a sharp sell-off in the digital currency market seen in recent months.

Reporting by Shivani Tanna in Bengaluru; Editing by Edwina Gibbs

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