What’s Going Down with Celsius?
In a shocking turn of events, regulators from five U.S. states are poking around the crypto lending platform, Celsius Network. Nope, it’s not just for the fun of it; it’s due to their recent decision to halt all user withdrawals. The Texas State Securities Board—led by Joseph Rotunda, who seems to think he’s the superhero of the crypto world—has stated that this investigation is as serious as a cat trying to take a bath.
The Investigation Begins
According to reports, Alabama, Kentucky, New Jersey, Texas, and Washington are all in on this investigation party. With statements indicating that the Texas enforcement team sees this as a top concern, folks, it’s clear that the regulators are not taking this lightly. Rotunda expressed significant worry that many retail investors might be in a bit of a pickle, unable to access their prized digital assets. His words, “The inability to access their investment may result in significant financial consequences,” hang heavily in the air.
Back to the Funding Circus
Adding a twist to this already tangled web, two firms that funded Celsius back in November 2021—WestCap Group and a Canadian pension fund—have decided to kick their cash cow to the curb, citing risks galore. They previously helped the platform snag a whopping $750 million Series B funding round, boosting the valuation to about $3.5 billion. But you know what they say, better safe than sorry!
Response from Celsius
The crypto market’s rollercoaster ride continues, and Celsius is scrambling like a cat on a hot tin roof. The company has roped in attorneys to explore every nook and cranny for solutions to their financial woes. CEO Alex Mashinsky emerged from a three-day Twitter hiatus, trying to assure anxious users that the team was working “non-stop.” He even called the community the “strongest in the world.” If only we could drain this kind of enthusiasm into a savings account!
@CelsiusNetwork team is working non-stop. We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us. — Alex Mashinsky (@Mashinsky) June 15, 2022
Previous Scrutiny and Future Worries
This isn’t the first time Celsius has caught the ire of state regulators. Back in September 2021, the Texas State Securities Board had its eyes on Celsius over allegations of unregistered securities sales. New Jersey even shut it down with a cease and desist order, citing similar violations. It’s clear that this is one hot potato that might only get hotter!
Market Implications
With Bitcoin and Ether prices dropping like they’re auditioning for a reality show, many crypto exchanges, including heavy hitters like Coinbase and Crypto.com, are cutting staff between 5% and 20%. It’s a chaotic situation where everyone seems to be holding their breath as the market wades through turbulent waters. Whether you’re a die-hard crypto enthusiast or just someone who checked out this article over a cup of coffee, it’s essential to stay informed.
