Celsius Network pursuer by the regulators of two US states
- Two US states recently cracked down on the project called the Celsius Network.
- Both Texas and New Jersey accused the project of selling unregistered securities.
- New Jersey has already sent a cease and desist order, while Texas has filed for a hearing.
While the SEC’s legal battle against Ripple is the biggest clash between a regulator and a crypto project of this year, it is hardly the only one. In fact, another project — Celsius Network — is pursued by not one, but two regulators from different US states.
The project is seeing trouble in both New Jersey and Texas as of late, as regulators believe that it is selling unregistered securities, similarly to what the SEC is accusing Ripple of.
Crypto project Celsius pursued by two US States
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According to recent reports, the Texas State Securities Board has filed for a hearing, with the goal to potentially gain the approval for a cease and desist order against Celsium Network. It argues that the project is offering securities that were not licensed on either the state or federal level.
The filing came yesterday, September 17th, while on the very same day, the New Jersey Bureau of Securities announced that it already issued a cease and desist order against the crypto company. The Bureau claims that Celsius is funding its lending operations and proprietary trading through the sale of unregistered securities, at least partially. As such, it is violating the state’s securities law.
The state’s acting attorney general, Andrew Bruck, stated that financial firms that operate in the crypto marketplace are on notice, and those that operate in New Jersey need to comply with the local investor protection laws. He stressed that crypto companies are not immune from oversight, thus delivering a warning to any firm that thinks it can get away with selling unlicensed securities.
As for the Texas hearing, it is scheduled for February 14th, when it will be held in person or online, depending on the situation regarding the pandemic at the time. If the judge decides to grant the cease and desist order, the company and all of its affiliates will be required to stop offering their services in the state, at least until they register with the local regulators and pay their dues.