On September 17, New Jersey’s securities regulator ordered crypto lending platform Celsius to halt offerings of its interest accounts in the state.
The same day, the Texas State Securities Board filed a notice of a hearing in February to consider a similar move to stop Celsius’ offerings in the state.
Friday’s moves follow broader regulatory action to clamp down on crypto lending platforms throughout the U.S. Five state regulators have issued similar orders against Celsius competitor, BlockFi. Indeed, the first state to act in both cases has been New Jersey, where BlockFi is based.
The fundamental principle is that crypto interest accounts, while resembling bank accounts, are not backed by FDIC insurance, leaving customers more vulnerable to the platforms responsible for lending their funds out. Defenders of crypto interest accounts, meanwhile, point to the meager returns on U.S. bank savings accounts as compared to crypto platforms, some of which offer double-digit interest.
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