The U.S. Securities and Exchange Commission (SEC) and several state regulators are reportedly investigating the decision by crypto lender Celsius Network to freeze withdrawals.
The U.S. SEC and securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington are investigating the decision by crypto lender Celsius Network to freeze withdrawals, Reuters reported Thursday.
Texas’ director of enforcement Joseph Rotunda explained that officials representing the five state securities regulators met Monday morning to begin the investigation following Celsius’ withdrawal freeze announcement Sunday night.
Noting that the investigation is a “priority,” Rotunda said:
I am very concerned that clients – including many retail investors – may need to immediately access their assets yet are unable to withdraw from their accounts.
“The inability to access their investment may result in significant financial consequences,” he stressed.
Rotunda said he and his team learned about Celsius’ accounts freeze from the company’s tweet and blog post Sunday night.
Alabama Securities Commission Director Joseph Borg told the publication that the SEC has also been in communication with Celsius, adding that the crypto lender has been responsive to questions from the regulators.
Last year, regulators in a number of states, including Alabama, Kentucky, New Jersey, and Texas hit Celsius with a cease and desist order over the lender’s interest-bearing products, which they said should be registered as a security.
Moreover, Ben Armstrong, aka Bit Boy, announced a class-action lawsuit against Celsius and CEO Alex Mashinsky on Wednesday via Twitter.
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