The U.S. Securities and Exchange Commission (SEC) and several state regulators are reportedly investigating crypto lender Celsius Network’s decision to freeze withdrawals.
U.S. Securities Regulators Investigate Celsius Withdrawal Freeze
As Reuters reported on Thursday, the U.S. SEC and securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington are investigating a decision by crypto lender Celsius Network to freeze withdrawals.
Texas Enforcement Director Joseph Rotunda explained that officials representing securities regulators in the five states met Monday morning and opened an investigation following Celsius’ withdrawal freeze announcement Sunday night.
Noting that the investigation is a “priority,” Rotunda said.
I am very concerned that clients, including many individual investors, need immediate access to their assets but cannot withdraw from their accounts.
“The inability to access their investments could have significant financial consequences,” he stressed.
Rotunda said he and his team learned of the Celsius account freeze from the company’s tweets and blog postings Sunday night.
“Due to extreme market conditions, today we are announcing that Celsior is suspending all withdrawals, swaps, and transfers between accounts,” the company wrote.
Alabama Securities Commission Director Joseph Borg told the publication that the SEC is also communicating with Celsior, adding that the crypto ranger is responding to questions from regulators.
Last year, regulators in a number of states, including Alabama, Kentucky, New Jersey, and Texas, hit Celsius with cease-and-desist orders on the lender’s interest-bearing products, which they said should be registered as securities.
After a freeze on withdrawals, Celsius reportedly sought help from Akin Gump Strauss Hauer & Feld, a law firm specializing in financial restructuring. The crypto-rangers also reportedly hired Citigroup as an advisor.
Additionally, Ben Armstrong, aka Bitboy, announced a class action lawsuit against Celsius and CEO Alex Mashinsky on Twitter on Wednesday.
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