New York Attorney General Letitia James said she ordered two cryptocurrency lending platforms to stop operating in the state, and sent three other platforms letters with questions about their operations.
Although James did not name the firms, Nexo Financial LLC confirmed in a statement that it had received a cease-and-desist letter, while a person familiar with the matter said Celsius Network LLC was among the firms that were contacted for more information. The request was received.
“Cryptocurrency platforms must comply with the law like everyone else,” James said in a press release on Monday, which is why we are now forcing two crypto companies to close and three more to immediately answer questions. Huh.”
The release added that virtual currency lending products “fell within any one of several categories of ‘security’ under the Martin Act,” which means they must be registered with the attorney general’s office.
The Attorney General’s office posted the two letters on its website along with the release. Although the office revised the names in the letters, the title requesting more information had “Celsius Letter” and another that ordered the companies to be closed and left contained the “Nexo Letter”. A person familiar with the matter confirmed that Celsius had received the information request, and Nexo confirmed that it had received a cease-and-desist letter.
Nexo co-founder Antoine Tranchev said in a statement that the company does not offer its earnings or exchange products in New York “so it doesn’t make sense to get C&D for something that we offer in NY anyway.” are not.” He said the company would respond to the attorney general and described the issue as “a clear case of mixing letter recipients.”
A Celsius spokesperson did not immediately respond to a request for comment.
Crypto lending firms have rapidly accumulated billions of dollars by offering customers accounts that let them deposit cryptocurrencies and in some cases earn double-digit interest. Unlike bank accounts, crypto accounts are not federally insured, and some regulators have mandated that accounts be registered securities with greater disclosure of their risks.
New York joined regulators in Kentucky, Texas, Alabama, Vermont and New Jersey in taking action against cryptocurrency lending firms. Companies targeted by those states include BlockFi Inc. and Celsius.
In February, crypto exchange Bitfinex settled with James over allegations that he concealed the loss of customers and corporate funds and lied about reserves. Without admitting or denying any wrongdoing, the authorities controlling Bitfinex and associated stablecoin Tether agreed to pay $18.5 million and cease all trading activity in New York and New York.
This story has been published without modification in text from a wire agency feed.
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