Multiple US state regulators investigating crypto exchange Celsius freezing accounts
Celsius' decision to freeze crypto lending accounts and customer redemptions led to a Bitcoin crash that took the value to its lowest level since January 2021.
Multiple state securities regulators in America are investigating crypto lender Celsius' decision to freeze customer withdrawal accounts earlier this week. The decision led to Bitcoin dropping to an 18-month low of $20,079.72 per token.
According to Reuters, regulators in the states of Texas, Alabama, Kentucky, New Jersey, and Washington are opening investigations into the crypto company's actions. Last September, authorities from Kentucky, New Jersey, and Texas had all sent a cease-and-desist notice to Celsius, stating that its interest-bearing products must be registered as securities.
Celsius' business model is to provide outlandish interest-based returns to those investors who will deposit specific crypto tokens with the company. In October, Celsius CEO Alex Mashinsky has said that the company had $25 billion in assets, while its website currently shows it has $11.8 billion under management.
It should be noted that the entire cryptocurrency industry saw more than $400 billion wiped off the market after the Terra and Luna crashes last month.
Alabama Securities Commission Director Joseph Borg also told Reuters that the SEC is involved in the investigation, although the organisation has not commented on the issue yet.
Edited by Megha Reddy
