The Celsius Network has drawn the wrath of Kentucky’s securities regulator in the recent legal move by a United States state against the digital asset startup and its lending products.
In a recent filing, the state’s Division of Securities, part of the Kentucky Department of Financial Institutions, released a cease-and-desist order against the startup over its “Earn Interest Accounts.”
The regulator expressed concerns over the startup’s language apropos interest earned on certain digital asset accounts that Celsius labels as “rewards” or a “financing fee.” The regulator claims that Celsius’ interest-bearing accounts infringe Kentucky’s securities law and is unsuccessful in divulging to users what happens with their deposits and whether users are safeguarded under the state’s securities protections.
Notably, Kentucky’s filing is yet another hit on the embattled startup that has already been questioned by Alabama, Texas, and New Jersey.
Last week, Celsius CEO Alex Mashinsky discontinued his digital asset lending firm’s impasse with state regulators. In a livestream, he told his audience that he welcomes the prospect of educating the financial regulators on how his business functions. Celsius may request an emergency hearing to confront the decision or may appeal in court.
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