- Crypto lender Celsius received an order to stop offering interest accounts.
- The Texas State Security Board filed a case to halt Celsius’s offering in Feb.
- Five State Regulators have issued the same order to Celsius opponents.
On September 17, New Jersey Security Regulators ordered crypto lender Celsius to stop offering its interest accounts in the country. The same day, Texas State Security Board filed a case showing the same move in February to halt Celsius offerings.
Moreover, Friday moves serve full regulatory action to clamp down on crypto lenders throughout the U.S. As a result, five state regulators have issued the same order to Celsius’s opponent, BlockFi. Indeed, the first state to work in both cases has been where BlockFi is based, New Jersey.
Furthermore, the main principle is that crypto interest accounts. While resembling bank accounts, FDIC insurance is not backed, leaving users unsafe to the platforms liable for lending their funds out. Meanwhile, defenders of crypto interest accounts lead to meager returns on U.S. bank savings accounts than crypto platforms. Some of which offer double-digit interest.
As SEC Chairman Gary Gensler recently told, crypto lending and staking platforms:
That platform might be answering, as many of them do, we’ll give you a four percent or seven percent return if you stake your coins with us or you transfer use. Also, the platform will stake your tokens. So that brings on all the indicia of what Congress is trying to protect under the securities laws.
Neither Celsius nor BlockFi responded to demands for comment as of press time.