Crypto lending firm Celsius Network has announced it will be launching a custody solution for users based in the United States in response to discussions with local regulators. Only “verified accredited investors” in the United States will be able to add coins to their Earn accounts starting on April 15 while users outside the country will be unaffected.
Only The Accredited Us Investors Will Earn From Celsius
In a Monday announcement, they said its Earn product, which allows users to earn interest on crypto, would be unavailable to U.S. residents making transfers starting on Friday. According to the firm, any coins transferred to interest-earning accounts before Friday “will continue to earn rewards,” but “new transfers made by non-accredited investors in the United States” will be held in custody accounts.
Only “verified accredited investors” in the U.S. will be able to add coins to their Earn accounts, while users outside the country will be unaffected. Celsius said the changes to its products were the result of “ongoing discussions with United States regulators.” In 2021, some state-level regulators moved forward with cease and desist orders against the platform for allegedly offering unlicensed securities with its interest-earning accounts.
“Our industry is going through a paradigm shift,” said Celsius CEO and founder Alex Mashinsky. “In line with recent regulatory guidance, there will be changes to the way our Earn product will work for users based in the United States.”
Earn accounts were the subject of a hearing announced by the Texas State Securities Board in September 2021, as well as a cease and desist order from the New Jersey Bureau of Securities related to “the sale of unregistered securities.” Should regulators at the state or federal levels have moved forward with enforcement actions against the lending platform, Celsius Network and its affiliates Network Limited, Celsius US Holding and Celsius Lending would likely have been affected.