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Kentucky Issues Cease-and-Desist Order Against Celsius Network
The state is the fourth to take legal action against the crypto lender.
Updated May 11, 2023, 6:12 p.m. Published Sep 24, 2021, 7:25 p.m.
Celsius Network has drawn the ire of Kentucky’s securities regulator in the latest legal move by a U.S. state against the crypto startup and its lending products.
In a filing Thursday, the state’s Division of Securities, part of the Kentucky Department of Financial Institutions, issued a cease-and-desist order against the startup over its “Earn Interest Accounts.”
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The regulator took issue with the startup’s language regarding interest earned on certain crypto accounts that Celsius dubs “rewards” or a “financing fee.” The regulator alleges that Celsius’ interest-bearing accounts violate Kentucky’s securities law and fail to disclose to customers what occurs with their deposits and whether customers are protected under the state’s securities protections.
Celsius may request an emergency hearing to challenge the decision or may appeal in court.
Kentucky’s filing is yet another blow to the embattled startup that has already been challenged by Alabama, New Jersey and Texas.
Last week, Celsius CEO Alex Mashinsky dismissed his crypto lending firm’s standoff with state regulators, telling an audience in a livestreamed address that he welcomes the chance to “educate” the regulators on how his business functions.
Read more: 3 States: Alabama Securities Commission Also Claims Celsius Violated Securities Laws
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