Celsius Network, a cryptocurrency lender which filed bankruptcy last month has now landed into another trouble. Department of Financial Protection and Innovation (DFPI) issued an order against the lending platform and its CEO, Alex Mashinsky.
Celsius tricked Crypto investors
According to DFPI, Celsius Network and its CEO misrepresented and omitted the material in the offer to their crypto investors. Specifically, the lender deceived the investors over the risk of depositing digital assets.
The order mentions that Celsius represented gives 80 percent of its revenue to the customers. It added that investors were entitled to the rates fixed by the lending platform.
DFPI regulates and licenses financial services. It also includes state chartered banks, credit unions, mortgage lenders, and more.
The agency discovered that Celsius provided accounts that permitted the users to earn interest on their digital assets after depositing them on the platform. However, it did not qualify those accounts as securities in accordance with California law.
