Securities regulators of 5 states in the US conduct investigation of Celsisus

Securities regulators in five US states are reportedly investigating crypto lender Celsisus over its decision to suspend customer withdrawals this week.

According to a report by Reuters, Texas Securities Commission’s director of enforcement, Joseph Rotunda, revealed that officials in five US states including Texas, Alabama, Kentucky, New Jersey and Washington are preparing to launch an investigation of Celsisus. He stated the following:

“I am concerned for many clients, especially retail investors, because they cannot withdraw money from their accounts on Celsius. The inability to access an investment can have significant financial consequences.”

EXCLUSIVE State securities regulators investigating Celsius accounts freeze https://t.co/NYgZCBS39n pic.twitter.com/TqauYKJLnL

— Reuters (@Reuters) June 17, 2022

Rotunda confirmed that regulators from the five states met this week to begin an investigation into Celsisus, which froze customer accounts during a liquidity crisis stemming from “Chain effect” stETH – Alameda – Celsius.

Accordingly, in a blog post on June 13, Celsius told its more than 1.7 million customers that it would be suspending withdrawals, swaps, and transfers of crypto between accounts, citing harsh market conditions.

.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2

— Celsius (@CelsiusNetwork) June 13, 2022

On the other hand, Reuters Alabama Securities Commission Director Joseph Borg shared that Celsius has responded to inquiries from regulators in Alabama, Texas, New Jersey and Kentucky, but the investigation is still at an early stage. head. In addition, Borg also revealed that the US Securities and Exchange Commission (SEC) also contacted Celsius, but the SEC declined to comment to confirm this information.

But it wasn’t until June 15th that Celsius CEO Alex Mashinsky broke his three-day streak of silence and took to Twitter to announce his company was focused on addressing customer concerns and very Thanks for hearing from so many users.

@CelsiusNetwork team is working non-stop. We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.

— Alex Mashinsky (@Mashinsky) June 15, 2022

“Seeing you all united is a clear sign that Celsius’s community is the strongest in the world. This is a difficult time, and your patience and support both mean a lot to us.”

While CEO Alex Mashinsky struck an upbeat tone on social media, Celsius has begun hiring his own lawyer to prepare for the worst-case scenario of bankruptcy. Even, the concern from Celsius has become a widespread danger to the market when the strong indirect impact caused the Three Arrows Capital event to have “liquidity problems”, massive liquidation followed by a wave The negativity continues to impose on Tether (USDT) and the DeFi space. Just on the morning of June 17, MakerDAO had to stop “pumping money” for Aave for fear of risks from Celsius.

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