The financial protection and innovation regulator in California has taken yet another strict action against one of the cryptocurrency platforms.
The particular regulator “DFPI” has taken an action against a platform it claims to have failed to comply with the local regulatory guidelines.
DFPI Takes Action against Celsius
According to sources, the regulatory authority of California has issued a warning against Celsius. Celsius, a cryptocurrency lending platform has received an order from DFPI, ordering it to refrain from providing services in the state.
For this purpose, the regulatory authority has reportedly issued a desist order for the lending platform. The order has made it clear that the platform is not to offer its cryptocurrency or digital assets-related securities to the locals of California State.
Celsius Cannot Offer Crypto Securities While Undergoing Bankruptcy
By now, the entire cryptocurrency industry knows that Celsius, a major cryptocurrency lending platform a few months back is undergoing bankruptcy.
The platform still continues to offer cryptocurrency-related services to people from around the world. However, the regulatory authority in California wants to make sure that its locals are safe from Celsius.
Therefore, the watchdog has issued a notice that Celsius must not offer any more cryptocurrency or digital security-related services to the locals in California.
The platform is neither allowed to sell nor do marketing of the securities in California under any circumstances. Celsius has no such authorization or permission to operate in California.
The order was issued on Monday
It was on Monday when the order was issued by the DFPI against the Celsius Network. The regulatory authority has addressed the CEO of Celsius Network, which is Alex Mashinsky.
The letter issued by the regulator also claims that the Celsius Network and its CEO have made materialistic omissions and misrepresentations.
They did this to gain the trust and attention of the investors and have them acquire cryptocurrency interest accounts. The firm showed irresponsibility and made false claims when convincing people to make deposits in the form of digital assets.
Warning for the Locals
According to the regulator, having funds deposited to the Celsius Network is full of risks. This is because, at any time, the third-party custody services may end up losing their access to digital assets.
This may hinder the lenders from returning the securities to the Celsius Network on time or may bar them entirely. This would result in the investors not being able to take out their funds on time or may not be able to withdraw them at all.
Celsius Network is not the only platform that has been ordered to stop providing services in California by the DFPI. In the past, the DFPI has done the same with Voyager and BlockFi which were also cryptocurrency-related firms.