Cryptocurrency lender Celsius Network will suspend earning rewards to non-accredited investors in the US that transferred coins to the platform starting from April 15, 2022. The company said in a blog post that existing deposits will not be affected by the update and will still receive interest payments for as long as they remain in their earn accounts.
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Starting from April 15, Celsius will be transferring all new deposits to a new custody solution for users in the US. Custody will serve as the centerpiece for crypto for non-accredited investors in the US. These investors could still continue to swap, borrow, and transfer within their custody accounts based on their local jurisdiction. Celsius also pointed out that for those in the US, who deposited coins as collateral against a loan that is opened prior to April 15, 2022, the company will return assets to their earn accounts when the loan is repaid.
The move comes after reports said that the US Securities and Exchange Commission (SEC) was weighing whether it should go after cryptocurrency firms Celsius Network, Voyager Digital and Gemini over their interest-bearing businesses. The SEC was particularly trying to figure out whether the companies' offerings should be registered as securities. As of press time, the companies are paying their clients rates higher than most US bank savings accounts by lending out their cryptocurrencies to other clients.
Last summer, four US financial watchdog accused BlockFi of violating securities law. The financial regulators of Texas, Alabama, Vermont and New Jersey believe that the company has been funding its business at least partly through the sale of unregistered securities.
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