Crypto lender Celsius is “deeply insolvent”, says Vermont’s financial regulator

On Tuesday, the Vermont Department of Financial Regulation (DFR) notified investors to exercise caution with the crypto lender Celsius.

It called the lender “deeply insolvent” and operated without a proper license.

The New Jersey-based firm offered interest-bearing products to cryptocurrency depositors on the platform.

Celsius distributed its customer funds across high-risk and illiquid investment, trading and lending activities in accordance with notification.

Most of Celsius’ current assets are illiquid, with the chances of the company repaying its debt obligations low, according to the Vermont-based regulator.

“Previous statements by the company, its CEO and other Celsius representatives about the safety of customer funds and the company’s ability to meet withdrawal obligations are untrue,” read the notice issued by Vermont’s DFR.

The regulator also indicated that the firm does not have a license to operate in Vermont, and had been involved in offering unregistered securities through its cryptocurrency accounts.

“The department believes that Celsius has been involved in an unregistered securities offering by offering cryptocurrency interest accounts to retail investors. read the notice. “Celsius also lacks a money sender license. This means that Celsius until recently operated largely without regulatory supervision.”

Celsius in hot water

DFR’s warning is just the latest in what has been a number of bad news for the company.

June 13 Celsius announced its decision to suspend operations, citing “extreme market conditions” in a blog post.

Following the announcement, the company’s CEO Alex Mashinsky offered investors’ trust, and assured them that the company was “focused on your concerns and grateful to have heard from so many. Seeing you get together is a clear sign that our society is the strongest in the world. This is a difficult moment; your patience and support means the world to us. “

Mashinksys’ last registered Twitter activity was on June 30.

Vermont’s DFR is also a broader multi-state investigation of the troubled cryptocurrency lender.

Security regulators in a number of states, including Alabama, New Jersey, Texas and Washington, all began investigating Celsius last month.

CEL, the company’s original token, traded at $ 0.73, up just 0.13% over the last 24 hours.

The token is down 91% from its records of $ 8.02, recorded in June 2021, according to data from CoinMarketCap.

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