Vermont watchdog declares Celsius insolvent

Vermont’s Department of Financial Regulation (DFR) has judged embattled cryptocurrency lender Celsius Network as “deeply insolvent”.

The lender will not be able to honor any outstanding obligations to creditors or consumers, the regulator concluded on Tuesday.

According to the DFR, the crypto lender has also offered an unregistered securities offering, and was selling cryptocurrency interest accounts to retail investors without the necessary safeguards.

The regulator continued to outline the specific issues the platform faced, including a lack of money transmitter license and operating without regulatory oversight. The watchdog named other shortcomings such as failure to disclose financial conditions and concomitant risk factors.

“Due to its failure to register its interest accounts as securities, Celsius customers did not receive critical disclosures about its financial condition, investing activities, risk factors, and ability to repay its obligations to depositors and other creditors”, it said.

Vermont is not the only state that is targeting Celsius Network. Regulators from other jurisdictions have also joined in, including Alabama, Kentucky, New Jersey, Texas and Washington.

The current litany of investigations into the cryptocurrency lender was triggered after the network said that its 1.7 million customers would not be able to withdraw or transfer any of their money.

These measures were enacted as a response to market conditions, which the company described as extreme. Celsius Network is not the only cryptocurrency lender to have done so.

Voyager, another struggling company, was also put under close regulatory scrutiny after choosing to freeze all withdrawals in the hope of preventing insolvency.

Without proper regulatory oversight though, nobody really knows how little liquidity the companies have left.

In the meantime, if you want to steer clear of investing during a bearish market, you can do something fun with your cryptocurrency. Go and game at 1xBit, FortuneJack or Bitcasino.io instead.

Source

Updated: 07/13/2022 — 09:00