Kentucky securities regulator, Kentucky Department of Financial Institutions, took action against cryptocurrency lender Celsius network (CRYPTO: CEL) by issuing a cease and desist order.
See also: CELSIUS NETWORK REVIEW
What happened: In Thursday’s emergency order, the regulator said Celsius Network offers its customers unregistered securities and is not transparent enough about what is done with customer deposits.
The regulator described the interest-bearing accounts offered by the company as “an unregulated market that poses unprecedented risk to consumers.”
The Kentucky Department of Financial Institutions said Celsius may request an emergency hearing to challenge the decision or appeal it to court. The order follows similar actions recently taken by regulators in Texas, Alabama and New Jersey.
Celsius claims to manage billions of digital asset deposits and pay high interest to those who provided those funds. Stablecoins deposited on the platform often offer double-digit annual percentage returns.
These services have recently come under scrutiny from securities regulators, and action has also been taken against competitor BlockFi.
See also: BLOCKFI VS. CELSIUS
Earlier this month, Coinbase Inc. (NASDAQ: COIN) decided to abandon plans to start its own cryptocurrency lending and yield account service after the Securities and Exchange Commission threatened to take legal action if such a product were launched.
Price action: According to data from CoinMarketCap, Celsius Network’s CEL token – which provides access to higher yields – is trading at $ 4.99 on Saturday after losing 1.01% over 24 hours.