Celsius is changing its offerings to comply with regulators and was the last call for the token rewards on Earn accounts so let’s read more in today’s latest cryptocurrency news.
BlockFi settled with the regulators over the high-itnerest accounts in February so Celsius is changing its offerings as well to comply with the regulators. The US regulators are taking aim at the crypto rewards platform like Celsius and BlockFi and in the direct blow, the latter agreed to stop paying rewards to the non-accredited investors on new deposits starting on April 15. The accredited investors will be eligible for rewards still as will non-accredited customers’ assets that are held by Celius so the new rules won’t apply to the non-US customers.
This change can dent Celisus’ business model which works in a way where customers store their crypto assets in the company and earn interest in the form of more coins and tokens. For example, Celsius now offers 7% annual returns on the stablecoins like Tether and USDT, 5% for Solana in 3% for wrapped BTC. Celsius loans these tokens out at higher rates to the borrowers.
A few state securities regulators like New Jersey, Texas, and Alabama accused the platform of offering unregistered securities. The US SEC as well as other regulators see the high-interest accounts as securities like unsecured bonds with the borrowers repaying a loan without putting up the collateral. BlockFi settled with the SEC and other states for $100 million over failing to register the BlockFi itnerest account. Neither admitted nor denied the SEC charges and BlockFi even scuttle the acounts for US users saying that it plans to create an SEC-registered product that can allow clients to earn interest on the crypto assets.
Celsius is going through a similar route citing ongoing discussions with the US regulators as the impetus behind changing the Earn product so the accredited investors are able to take home interest. Celsius will also release new custody products licensed in the US:
“Custody will serve as the centerpiece of your home for crypto, providing a secure way to navigate across Celsius’ products, including store, access, borrow, spend, earn and grow.”
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