Lending platform Celsius Network raised $400 million in a funding round
The $400 million funding round of Celsius Network has given a valuation of over $3 billion despite scrutiny from U.S. regulators.
Celsius Network chief executive, Alex Mashinsky, is more excited about the funding round of the cryptocurrency lending platform and said, “It’s not the $400 million. It’s the credibility that comes with the people who wrote those cheques.” He also added, “We do not, in any circumstance, take customer assets and buy more of them or sell them because that’s not our business. Our business is to earn yield, and...how we earn yield does not involve trading the asset itself.”
The funding round has taken place at a time of regulatory controversy for the firm.
The New Jersey Bureau of Securities, on September 17, 2021, filed a cease-and-desist order against Celsius Network to stop the platform from offering its high-interest accounts to the customers of New Jersey by the end of October.
The Texas State Securities Board ordered Celsius, on the same day, to appear for a hearing on February 14, 2022. the Texas authority even threatened to issue its own desist order as well.
The executive of WestCap, Laurence Tosi, who led the funding round for Celsius Network, exclaims, “It’s quite typical for the regulators to begin examining some of the market leaders in order to clarify their own rules. This is part of the process of regulating a new market.”
The regulators are concerned about Celsius’ crypto interest accounts. It allows its customers to receive interest at rates that are far higher than that of a traditional bank.
One of Celsius’ competitors, BlockFi, is currently being pursued the same issue. BlockFi received a similar cease-and-desist order from the New Jersey attorney in July of this year.
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