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Securities regulators from five states probing into Celsius suspension of withdrawals 

  • According to Alabama Securities Commission Director Joseph Borg, securities regulators in Alabama, Texas, New Jersey, Washington, and Kentucky are in the initial stage of the investigations.
  • On Wednesday, Celsius CEO stated on Twitter that the company has taken note of the concerns of its customers.

Crypto lending company Celsius Network recently informed its 1.7 million customers that it is halting all withdrawals, swaps, and transfers between accounts. The reason was reportedly due to extreme market conditions and stated that the decision is in the interest of its community. In response, state securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington have commenced investigation into the decision according to Joseph Rotunda, enforcement director at the Texas State Securities Board. He disclosed that officials started the official investigation on Monday, and considered it a priority.

I am very concerned that clients – including many retail investors – may need to immediately access their assets yet are unable to withdraw from their accounts. The inability to access their investment may result in significant financial consequences.

This was also confirmed by Alabama Securities Commission Director Joseph Borg. According to him, securities regulators in Alabama, Texas, New Jersey, and Kentucky are in the initial stage of the investigations and admitted that Celsius has been very responsive so far. 

Celsius lures customers with huge returns

The decision to freeze the withdrawal of its customers’ accounts was initially spotted by Rotunda and his team on the company’s blog post. Celsius’ contact with authorities dates back to September when regulators in Kentucky, New Jersey, and Texas imposed a cease and desist order. Authorities asked the company to register its interest-bearing products as securities. BlockFi also got a fine of $100 million in February from regulators for failing to register its lending product. 

On Wednesday, Celsius CEO Alex Mashinsky said on Twitter that the company has taken note of the concerns of its customers.

Celsius Network team is working non-stop. We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.

The operation of the crypto lending company is just like the banks; it gathers deposits from retail customers and invests them in the equivalent crypto markets like the Decentralised Finance (DeFi) sites. Retail customers are then offered huge returns such as 18.6 percent annually. It is said that the promise of huge returns influenced a lot of investors to deposit their assets on the platform. 

According to Mashinsky, Celsius had $25 billion in assets in October. The assets are now worth around $11 billion as of last month. The company’s wholesale crypto investment is believed to have been affected by the general crypto market pullback following the Terra crash, which might have made it difficult to meet redemptions from customers. 

Der Beitrag Securities regulators from five states probing into Celsius suspension of withdrawals  erschien zuerst auf Crypto News Flash.

Apparently, Peter Schiff Blames Himself For Bank Closing

Against all odds, Peter Schiff admits he played a role in his Puerto Rican’s bank closure that may cost his customers a lot of money.  Covered: Peter Schiff’s Bank Closed By Regulators Peter Schiff Blames Himself Peter Schiff’s Bank Closed By Regulators Peter Schiff, who’s arguably best known for predicting the eventual demise of Bitcoin,::Listen

Against all odds, Peter Schiff admits he played a role in his Puerto Rican’s bank closure that may cost his customers a lot of money. 

Covered:

  • Peter Schiff’s Bank Closed By Regulators
  • Peter Schiff Blames Himself

Peter Schiff’s Bank Closed By Regulators

Peter Schiff, who’s arguably best known for predicting the eventual demise of Bitcoin, neglected to predict the eventual demise of his Euro Pacific Bank, which was closed on July 1st. The bank operates like any regular U.S. bank with chequing, savings accounts, as well as access to investments. However, it isn’t FDIC insured.

According to Peter Schiff, the bank, located in the libertarian-friendly U.S. Territory Puerto Rico, was forced to close by Puerto Rican regulators due to Net capital issues — a fancy way of saying they aren’t liquid enough to honor redemptions.

It appears Peter Schiff’s bank is the victim of a good ole fashioned bank run, the kind his recent crypto adversaries have suffered. However, it should be noted that Peter Schiff is the one reporting the bank has closed for those reasons.

Confusing matters, Schiff has noted that his bank has “enough cash and #gold for all depositors to be made whole.” We reached out to Schiff, but, as of press time, he has yet to respond.

Originally, a report surfaced from the Associated press back on July 1st that Schiff was fighting to keep his bank. The report stated that Puerto Rico’s Office of the Commissioner of Financial Institutions was after the bank for three reasons: “a lack of internal controls, a lack of compliance and a level of insolvency.” Moreover, the J5 agency’s (an international agency that monitors antimoney laundering compliance) investigation into the bank is separate from the investigation conducted by the Puerto Rican agency.

Schiff also claims he had a buyer lined up who would inject capital into the distressed bank. Why a buyer would need to inject capital if they have enough to offer redemptions is unclear. We reached out to comment, but have yet to hear from Schiff as of press time.

Recommended: Bitcoin, Peter Schiff, And Squid Game

Peter Schiff Blames Himself

In a rare out-of-character move for the typically self-assured Gold Bug, Peter Schiff put the blame on himself, sort off, for what’s happened.

When pressed by a user that his Twitter antics (among other things) led to regulators coming after him, Schiff replied, “Yes. I’m being punished for my political opinions. But I have a Constitutional right to express my opinions. The government has violated those rights by illegally going after me for expressing them.” 

Of course, there is no proof that this is behind the investigations, just speculation. Schiff has given myriad reasons for his bank’s demise via Twitter, and, in sum, the reasons feel unintentionally a lot like a Gish gallop.

Despite the perhaps humility — depending on how you interpret it — it doesn’t appear like Schiff learned that lesson in time. Schiff had recently crowed about how right he was about Celsius losing its customers money. Sadly, it appears like Celsius customers he mocked, there is a good chance that Euro Pacific Bank customers will lose their money.

“…if the bank stays in receivership and I can’t convince regulators to live up to their initial support of the sale, then I think customers will lose access to their accounts and suffer needless losses.”

Recommended: Peter Schiff’s Son Admits ‘My Dad Was Right All Along’ About Bitcoin Going To Zero

The post Apparently, Peter Schiff Blames Himself For Bank Closing appeared first on CryptosRus.

Securities regulators from five states probing into Celsius suspension of withdrawals 

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