Washington State Joins Celsius Bankruptcy Case as Interested Party

The state’s move continues a trend of state-level regulators moving faster than the feds on regulating crypto.

AccessTimeIconSep 23, 2022 at 4:00 a.m. UTC
Updated Sep 26, 2022 at 4:36 p.m. UTC

The bankruptcy case of beleaguered crypto lending platform Celsius Network has a new interested party: the Washington State Department of Financial Institutions.

  • In a motion filed Thursday evening, the state’s Assistant Attorney General Stephen Manning asked Judge Martin Glenn, who is overseeing the case, to admit him on behalf of Washington’s financial regulator.
  • Securities regulators in Washington, Alabama, Kentucky, New Jersey and Texas began an investigation into Celsius after the company suspended customer redemptions in June.
  • While the U.S. Securities and Exchange Commission (SEC) has been working with its counterparts to regulate crypto via Washington, D.C., states such as Washington have taken a more active approach in regulation as there’s a growing belief that the Feds are moving too slowly.
  • The Vermont Department of Financial Regulation perhaps had the strongest words regarding Celsius when it suggested in September that the company’s structure resembled a Ponzi scheme.
  • "This shows a high level of financial mismanagement and also suggests that, at least at some points in time, yields to existing investors were probably being paid with the assets of new investors," the filing from Vermont said.

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