States regulators are becoming hostile to crypto lending services. The latest example is Kentucky’s securities regulator.
According a Thursday filing, the Kentucky Department of Financial Institutions issued a cease-and-desist order against the crypto lending startup for its ‘Earn interest accounts’.
This is the fourth US regulator to move against crypto startups within a week. Earlier, the regulators in Texas, Alabama, and New Jersey had issued similar notices against Celsius.
Kentucky’s regulator raised concerns about Celsius’s use of words like “rewards” or “financing fee”. He also claimed that the crypto startup was in violation of state securities laws. The notice also stated that the crypto company had not disclosed how it was using the deposits.
State Regulators Vs. Crypto Lending Firms
However, Celsius isn’t the only cryptocurrency lending platform that has been subject to scrutiny by state regulators. BlockFi, another cryptocurrency lending platform, was previously the subject of a cease and desist order by regulators from Texas, New Jersey, and Alabama.
The Securities and Exchange Commission (SEC), at a federal level has not yet taken any action against Celsius and BlockFi. The SEC threatened Coinbase to sue them for launching a yield product. However, Coinbase was able to stop the threat.
