Celsius was given a cease and desist order by Kentucky's Department of Financial Institutions Division of Securities over its crypto interest-earning accounts.
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The order claims that Celsius has been engaging in securities-related activities.
"The Department has become aware that the Company is offering securities in the form of investment contracts in exchange for the deposit of assets with the Company. These investment contracts allow passive investors to earn profit in the form of interest on the assets deposited with the company," describes the order.
This comes amid a broader crackdown on cryptocurrency borrowing and lending businesses. Just seven days ago Celsius was ordered to stop offering interest-earning accounts in New Jersey and Texas.
Celsius is not the only company that has been dealing with this crackdown. In July BlockFi was accused of selling securities in the state of Alabama and was ordered to stop offering its interest-earning accounts in New Jersey.
In probably the strongest crackdown related to crypto borrowing and lending businesses, Coinbase was issued a Wells Notice by the SEC that was likely related to its Lend program that was nearly launched. The Lend program would have offered similar products to what BlockFi and Celsius have available.
Just about a week after Coinbase was issued the Wells Notice from the SEC Coinbase announced that it would no longer seek to offer its Lend program.
So far it is unclear how this situation will turn out. BlockFi has been given several extensions from the state of New Jersey over its offering of interest accounts in the state, which shows there is at least some level of debate about whether these offerings are indeed securities.