Celsius Network Under Investigation After Blocking Withdrawals

Celsius Network is undergoing several investigations in the US after blocking the withdrawal of assets.

Crypto lending firm Celsius Network made the decision to block its customers from withdrawing funds and a number of other transactions on Sunday, leaving nearly two million users unable to access their funds. State safety boards in Alabama, Kentucky, New Jersey, Texas and Washington are launching investigations into Celsius today, according to a Reuters report. The SEC has also contacted the company.

Celsius network under several US investigations

This is not the first time that a cryptocurrency lending company has run into trouble with state and federal authorities. Several states last year ordered Celsius to stop selling so-called high-yield crypto products, which many investors see as risky because they don’t offer the same FDIC protection as banks. Currently, New Yorkers and Washingtonians cannot buy assets on Celsius.

Texas State Security Council officials began discussing a freeze on Celsius’s client assets on Monday, agency director Joseph Rotunda told Reuters. “I am very concerned that clients, including many retail investors, may need immediate access to their assets, but unfortunately they cannot do so from their account. Not being able to access their investments could have serious financial consequences.”

after blocking the withdrawal of assets

In a note explaining its decision to users, Celsius cited “extreme market conditions”as the primary motivation. This block concerns transfers, withdrawals and exchanges between accounts. “We are making this decision today to better position Celsius to meet our withdrawal obligations over time,” the company wrote at the time.

Users responded via social media all weekend, often talking about the negative impact of the lockdown on their own finances. The user stated on Twitter that, without access to his funds, the platform liquidated a loan of more than $27,000. “I didn’t leave the banks for this reason,” he explained.