Two US states are filing legal actions against a cryptocurrency lending company they claim is selling unregistered securities.
Texas and New Jersey are taking legal measures against London-based Celsius Network (CEL) for allegedly raising funds through sales of unregistered products.
New Jersey is issuing a cease and desist order for unlawful sales of “interest-earning cryptocurrency products,” forcing the network to stop offering those products in the state. According to the statement, Celsius is partly funding its crypto lending and trading operations through the sale of securities that are allegedly in violation of the New Jersey Securities Law.
Texas is filing a notice for a hearing next year to determine if it should also issue a cease and desist order against Celsius for illegally selling “cryptocurrency interest-earning accounts.”
Texas’ filing means CEL will have to show why they shouldn’t be compelled to stop offering securities to state residents. The hearing is scheduled for February 14th, 2022.
New Jersey’s decision comes after the state issued a similar order in July against BlockFi, another crypto lending platform. Acting Attorney General of New Jersey Andrew Bruck says other crypto lending companies operating in the state should take note of the trend.
“Financial companies operating in the cryptocurrency marketplace are on notice… if you sell securities in New Jersey, you need to comply with New Jersey’s investor protection laws. Companies dealing in cryptocurrencies are not immune from oversight.”
CEL is trading at $5.38 at time of writing, down over 20% from its 30-day high of $6.49, according to CoinMarketCap.
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