ORDER FOR INVESTIGATION ON CELSIUS HAS BEEN PASSED MANY STATES
The Crypto Celsius Network lender has decided to suspend customer withdrawals and other transactions on Sunday, leaving nearly two million of its users unable to access their funds. Now, state security boards in Alabama, Kentucky, New Jersey, Texas and Washington have launched an investigation into Celsius, Reuters reported. The SEC also contacted the firm. Engadget has reached out to the agency and will review if asked.
This is not the first time a crypto lender has gotten into trouble with government officials and provinces. Many states ordered Celsius last year to stop selling so-called high-yield crypto products, with many investors warning of the risk because they do not offer the same FDIC protection as banks if institutions fall below it. Currently, citizens of New York and Washington counties cannot purchase property through Celsius.
Texas State Securities Board officials began discussing Celsius' suspension over consumer goods first Monday morning, the organisation's legal director Joseph Rotunda told Reuters. "I am very concerned that customers - including many store investors - may need immediate access to their assets but may not be able to withdraw from their accounts. Not being able to access their investments could lead to significant financial consequences," he said.
In its invitation to users explaining Sunday's decision, Celsius cited "extreme market conditions" as the main reasons. Suspension includes transfers, withdrawals and exchanges between accounts. "We are taking this step today to put Celsius in a better position to honor, over time, its withdrawal obligations," the company wrote.
Users responded via social media over the weekend, often sharing the negative effects the snow had on their finances. One of the users said on Twitter that, because they could not get the money to pay or send the collateral, the forum canceled a loan amounting to more than $ 27,000. "This is not a reason for me to withdraw from the bank," they wrote.