The individual state regulators in the United States are getting hostile against crypto lending services as Kentucky’s securities regulator becomes the latest to move against Celsius.
According to a filing on Thursday, the state’s Division of Securities, which is a part of the Kentucky Department of Financial Institutions, issued a cease and desist order against the crypto lending startup over its ‘Earn Interest Accounts’.
This is the fourth US state regulator to have moved against the crypto startups in a matter of a week: earlier the regulators of Texas, Alabama and New Jersey issued similar notices against Celsius.
The Kentucky regulator pointed out issues with some of the words used by Celsius related to its services like ‘rewards’ or ‘financing fee’ and alleged that the crypto startup is in violation of state securities laws. Additionally, the notice elaborated that the crypto company failed to disclose how it is using the deposits.
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Though Celsius is yet to issue any statement on the fresh Kentucky notice, it earlier said: “We are disappointed these actions have been filed and wholeheartedly disagree with the allegations being made that Celsius has not complied with the law. We always have, and will continue to, work with regulators in the U.S. and globally to operate in full compliance with the law.”
In an ask-me-anything session, Celsius CEO Alex Mashinsky said that he is willing to explain the crypto lending business to the regulators.
State Regulators Vs. Crypto Lending Firms
But, Celsius is not the only crypto lending platform under the scanner of the state regulators. Earlier, the regulators in Texas, New Jersey and Alabama filed for a cease-and-desist order against BlockFi, another crypto lending platform.
At a federal level, the Securities and Exchange Commission (SEC) has not taken any action against Celsius or BlockFi yet. But, the SEC threatened Coinbase with legal action over the potential launch of a yield product, which the crypto company later scrapped.