Will SEC charge Celsius Founder for Running an Unregistered Lending Platform?
Nowadays, there is a lot of speculation going on regarding the crypto lending company Celsius and SEC. Recently, it has submitted a filing to sell the stablecoin holdings thereof which would in turn generate some liquidity for it to finance the operations thereof. The lender, based in New Jersey, wants to sell the stablecoins (those which are existing or those expected to be possessed by the company in the future). This move has been taken by Celsius to fund the Chapter 11-related cases being undergone by it after it filed for bankruptcy.
SEC Takes Stringent Measures against the Crypto Platforms
The U.S. Securities and Exchange Commission (SEC) has long been after the crypto lending firms for their unregistered lending services. On 1st September 2021, the SEC filed a lawsuit against the well-known lending venue BitConnect and Satish Kumbhani (the founder of the firm) for allegedly carrying out unregistered and fraudulent lending facilities throughout the globe to exploit innocent consumers and making illegal profits of $2B worth through such activities.
A couple of months back in July this year, a filing was made by an ex-contractor of Celsius named KeyFi Inc. (a platform established on the behalf of Jason Stone) against the crypto lender for defrauding the as well as owing several millions worth of dollars to the petitioners while violating the profit-sharing contract. In the previous year, Stone had also worked under Celsius Network. According to the filing, the defendant has made several million in gains coming from the transaction charges as well as rewards in return for token staking and other such services.
Although Celsius has been operating in the United States as a registered lending venue, however, the allegations of running a Ponzi as well as the overall approach of the securities regulator against the crypto platforms – including Ripple (the lawsuit of which is coming to a denouement soon) – are the factors indicating that the SEC may alter its perception about the lending firm.
Celsius Might Catch the Attention of Securities Regulator
Formerly Ether was not categorized as a security by the SEC nonetheless the regulator has pulled back from that idea and in the latest turn of events claimed the jurisdiction over Ethereum Network claiming that its nodes (validators) are densely inhibited within the United States. Keeping in view the increasingly crypto-hostile temperament may lead the regulator to take action against Alex Machinsky (the founder of Celsius) as well as the lending company itself. No official statement has yet been given by the U.S. watchdog nevertheless the speculations are rising high.
