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 7:25 p.m. UTC
Updated May 11, 2023 at 6:12 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

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.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Sebastian Sinclair

Sebastian Sinclair is a CoinDesk news reporter based in Australia.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.