Previously in this year, BlockFi (a crypto lending platform) became a target of the state regulators in Alabama, Texas, and New Jersey. The states other than them agreed to them too since then. Currently, during this week, Celsius is again facing the same condition known as “cease-and-desist”. This demand has been presented by all the three states in front of the company.
Celsius vs. regulators: a new instance
It’s becoming quite apparent that some resisting elements are present in Celsius for fighting against the regulatory authorities as similar to BlockFi. On Friday, the officials of Texas submitted the filing of a “cease-and–desist” order for Celsius. The filing would require Celsius to necessarily justify before the state the reason for which it should not be compelled to halt all the products thereof to the citizens of the state. Celsius, almost like BlockFi, is experiencing the same allegations of being involved in providing unregistered securities to the residents. The hearing in Texas is scheduled to be held on 24th February.
Both New Jersey and Alabama seem to have issued resembling actions on the very day. New Jersey directed the firm to cease its product offering till 1st November. In a similar vein, Alabama required the company to explain the justification for not giving it an order to halt its product offering during the next 28 days. It has been told by a representative from Celsius that the company is utterly upset by such filing and denies the allegations leveled against it completely. The representative added that Celsius has complied with the law to its best. The further comments of the representative were that no instant alterations would be made regarding the consumers.
The rough venture
Only a few weeks later, the release of a blog post by Coinbase relating to the ongoing case from the securities department signified that it has moved ahead with its projected lend product. Since then, Coinbase has submitted a request for a “National-Futures-Association” license. However, the possible outcomes of the Lend product concerning the SEC are yet to be witnessed. In the meantime, Celsius has turned into a giant in DeFi with having $24B under community assets, which makes it the largest crypto lender. Up till now, the customers are to a great extent left unaware of the consequences of moving forward. Optimists see it as a good and regulated practice but the pessimists perceive it as mounting pressure from the regulatory authorities.