After Targeting BlockFi, State Regulators Now Set Their Eyes On Celsius
18 Septiembre 2021 - 9:38PM
NEWSBTC
Earlier this year, crypto lending platform BlockFi started facing
the heat from state regulators in New Jersey, Texas, and Alabama.
Other states have joined the fold since then, as well. Celsius this
week is now facing similar cease and desist demands from all three
of the same states that BlockFi first faced. Let’s take a look at
what we know thus far, and what it could potentially mean for DeFi
moving forward. Regulators Reach: What Celsius Is Facing It’s
becoming quickly apparent that Celsius is joining the fight in
facing regulators in the same vein that BlockFi has. On Friday,
Texas officials filed a cease and desist order against Celsius. The
filing will require Celsius to show the state why it shouldn’t be
ordered to stop offering it’s products to state residents. Celsius,
like BlockFi, faces accusations that it is offering residents
unregistered securities. The Texas hearing is scheduled for
February 24. Both Alabama and New Jersey seemingly issued similar
actions on the same day. New Jersey ordered the platform to stop
offering select products by November 1. In a similar action,
Alabama demanded that the platform show why it shouldn’t be halted
from offering products within 28 days. A Celsius representative
told Bloomberg that the firm is “disappointed these actions have
been filed and wholeheartedly disagree with the allegations being
made that Celsius has not complied with the law,” adding that the
platform would not be making any immediate changes in services for
clients. Celsius' native platform token, CEL, offers more
aggressive yield rates - but is not currently offered in the U.S. |
Source: CEL-USD on TradingView.com Related Reading | Analyst Puts
New Bitcoin ATH For October As Stablecoins Start Pumping Into BTC
DeFi’s Uphill Battle The news comes just a couple short weeks after
Coinbase released a blog post regarding an impending lawsuit from
the SEC, assuming that Coinbase moved forward with it’s anticipated
Lend product. Coinbase has since applied for a National Futures
Association license. It remains to be seen what happens with the
Lend product and SEC. Meanwhile, Celsius has quietly become a
behemoth in DeFi. The platform reportedly holds over $24B in
“community assets,” making it one of the biggest – if not THE
biggest – crypto lender and interest-account provider. What it
means for Celsius customers in the respective states taking action
remains to be seen, and BlockFi could end up being a case study
moving forward. However, what we’ve seen from BlockFi and
regulators thus far hasn’t been much to establish a precedent. Thus
far, throughout a handful of states, only new account registration
has been restricted. Customers on BlockFi prior to the regulatory
action have had no impact. To date, consumers have largely been
left in the dark on what sort of impacts could be seen here moving
forward. The optimist in this situation might say that these
actions could lead to regulation that establishes good practices
and frameworks for crypto lending platforms. However, the
pessimistic perspective would be led to believe that more states
could join the ranks and that DeFi could face increased pressure
from regulators given the impact on traditional banking
institutions. Either way, it seems hard to suggest that through
these individual state regulators have consumer protection at the
forefront. Where it leads from here remains to be seen. Related
Reading | While Broader Crypto Market Holds Its Collective Breath,
Whales Are Loading Up On Bitcoin Featured image from Pexels, Charts
from TradingView.com
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