Summary: According to Alabama Securities Commission Director Joseph Borg, Alabama, Kentucky, New Jersey, Texas, and Washington security regulators have begun an investigation of Celcius following their freeze of account withdrawals. According to Joe Rotunda of the TSSB, the investigation started Monday, 6/13, and is a "priority." On Sunday, Celcius shared a blog post announcing that they ...

According to Alabama Securities Commission Director Joseph Borg, Alabama, Kentucky, New Jersey, Texas, and Washington security regulators have begun an investigation of Celcius following their freeze of account withdrawals. According to Joe Rotunda of the TSSB, the investigation started Monday, 6/13, and is a "priority."

On Sunday, Celcius shared a blog post announcing that they would pause withdrawals, as well as their swap and transfer products, citing "extreme market conditions." According to rumors on Twitter, this was caused by the crypto lender's insolvency trying to prevent a selloff.

Rotunda, informed CoinDesk that his team learned of the account freeze through social media Sunday and met early Monday morning to begin the investigation of Celcius. "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," and continued saying, "The inability to access their investment may result in significant financial consequences."

Texas' scrutiny of Celcius is not a new development when they began investigating the platform's crypto interest accounts, who advertised returns of up to 17% on interest bearing crypto accounts, during September 2021. During a statement regarding the previous investigation, Rotunda said, "We are simply trying to get Celsius in compliance with the law so it can continue to operate legally and legitimately while protecting its clients and their assets." In light of the recent account freeze, it appears their skepticism of the platform was more than justified.

"We've been working with Celsius for a while," Joe Borg, the director of the Alabama Securities Commission, told CoinDesk. "We've asked for lots more information, and they're providing it." "We'll continue the investigation as to the company and whether or not we're going to do the BlockFi model – whether they're capable of it," Borg added, in reference to the $100 million Blockfi SEC settlement deal.


Author: Garrett Meifert