According to a consumer notice against Celsius Network from the Department of Financial Regulation, the leading firm is seriously insolvent. The activities of the cryptocurrency lender Celsius Network are having an impact on thousands of consumers, according to DFR’s press statement.
The lender’s inability to meet its obligations to account holders and other creditors is another point made in the DFR.
Celsius has halted its activities for over 32 days
Beginning in June, Celsius halted withdrawals, reduced staff, and hired restructuring specialists to provide guidance on its dire financial situation.
Earlier on Tuesday, the lender said that it had fully redeemed its loan on the decentralized financing (DeFi) network. As a result, as part of its restructuring plan, $26 million in collateral was released. A $418 million staked ether payment was also made to an unknown wallet.
According to DFR, Celsius’s previous operations were mostly unregulated because it apparently does not possess a money transmitter license.
The institution also neglected to disclose its interest accounts as securities, which prevented depositors and other creditors from being informed of any possible risks.
A number of investors were drawn to Celsius by the problematic crypto lending platform’s alluring 17 percent interest rate on deposits. One lovely day, the platform stopped all operations, including withdrawals. For more than 32 days, the clients have been unable to access their money.
An extensive inquiry against the platform has been started by the Department of Financial Regulation. Numerous crypto companies are in a precarious situation, making the bear market in cryptocurrencies unpleasant for many.
DFR also warned users to stay cautious of projects that offer returns that seem too good to be true.