Crypto lender Celsius is once again in the headlines- this time after being slapped with a cease and desist order by the state of Kentucky
Kentucky has become the latest state to bar Celsius from operating in its jurisdiction. Earlier, Alabama, Texas, and New Jersey had also initiated similar action. A Thursday filing by the Kentucky Department of Financial Institutions showed that the state had slapped Celsius with a cease and desist order in regards to offering interest accounts to users.
The Kentucky regulator is alleging that Celsius’ interest-bearing accounts violate state laws about securities. Celsius offers its users interest on specific crypto accounts, and these benefits often dubbed as 'rewards' and 'financing fee' are what the state pointed to as being illegal offerings.
The state also cited similar reasons to the ones given by the other states that had taken action against the crypto set-up. Kentucky said that Celsius had failed to reveal critical information to investors, further saying that these interest-bearing accounts presented a unique risk to customers. The Bluegrass State said that Celsius could challenge the decision via an emergency hearing.
While Celsius has not officially responded to the news, a spokesperson from Celsius had reportedly told Bloomberg (in response to the first three states) that the firm was disappointed and retained its disagreement with the floated allegations. It now seems that the route Celsius is taking with state regulators is reminiscent of what BlockFi faced a few weeks ago.
Another crypto set-up, Amber Group, formed in 2017, has joined the firms seeking to establish a presence in the US even with the heightened regulatory vigilance. The Hong Kong-based crypto company is planning to go public via a US listing early next year, according to CEO Michael Wu. Wu, however, maintained that all options remained open as a final decision had not been reached.
“The US is a likely destination, but we’re open-minded.”
Speaking to the South China Morning Post (SCMP), Wu established that the purpose to go public would be to achieve lower costs of borrowing, improve brand awareness and attract additional talent to the firm.
Amber Group only became a unicorn earlier this year after a $100 million Series B funding round, and the company allows users to gain up to a 16% annual percentage rate (APR) on the invested crypto assets. Lending products have themselves been a hot topic in the US even as Coinbase had to cancel its program due to regulatory scuffles with the SEC. BlockFi, Celsius and Coinbase have all had to deal with the US regulators in the past.
As such, Wu clarified that the crypto finance company would not offer any lending products to US users, if not allowed to and that Amber Group would tow the regulatory line in the country.
As per its website, Amber Group has $1.5 billion worth of assets under management with 400 employed personnel. The company serves both sized investors; retail and institutional investors.