Kentucky Issues Cease-and-Desist Order Against Celsius Network

The state is the fourth to take legal action against the crypto lender.

AccessTimeIconSep 24, 2021 at 1:00 a.m. UTC
Updated Dec 3, 2021 at 7:49 p.m. UTC

Sebastian Sinclair is a CoinDesk news reporter based in Australia.

Celsius Network has drawn the ire of Kentucky’s securities regulator in the latest legal move by a U.S. state against the crypto startup and its lending products.

In a filing Thursday, the state’s Division of Securities, part of the Kentucky Department of Financial Institutions, issued a cease-and-desist order against the startup over its “Earn Interest Accounts.”

The regulator took issue with the startup’s language regarding interest earned on certain crypto accounts that Celsius dubs “rewards” or a “financing fee.” The regulator alleges that Celsius’ interest-bearing accounts violate Kentucky’s securities law and fail to disclose to customers what occurs with their deposits and whether customers are protected under the state’s securities protections.

Celsius may request an emergency hearing to challenge the decision or may appeal in court.

Kentucky’s filing is yet another blow to the embattled startup that has already been challenged by Alabama, New Jersey and Texas.

Last week, Celsius CEO Alex Mashinsky dismissed his crypto lending firm’s standoff with state regulators, telling an audience in a livestreamed address that he welcomes the chance to “educate” the regulators on how his business functions.





DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Sebastian Sinclair is a CoinDesk news reporter based in Australia.

CoinDesk - Unknown

Sebastian Sinclair is a CoinDesk news reporter based in Australia.

Trending

1
CoinDesk - Unknown
Three Arrows Paper Trail Leads to Trading Desk Obscured Via Offshore Entities

As Three Arrows Capital collapsed under market pressure, its much-lesser known trading desk, TPS Capital, remained active, sources say. But a complex ownership structure might frustrate creditors' efforts to collect.

CoinDesk - Unknown
2
CoinDesk - Unknown
June Was Bitcoin’s Worst Month Ever

Plus, European crypto regulation comes into view.

CoinDesk - Unknown
3
CoinDesk - Unknown
What Traders Are Saying About Bitcoin's Biggest Monthly Loss in 11 Years

Poor macroeconomic sentiment, fears of inflation and systemic risks from the crypto market pushed the cryptocurrency below 2017’s highs.

CoinDesk - Unknown
4
CoinDesk - Unknown
Three Arrows Capital Files for Bankruptcy in New York Tied to British Virgin Islands Proceeding

A British Virgin Islands court ordered Three Arrows' BVI branch into liquidation earlier this week.

CoinDesk - Unknown