California’s Department of Financial Protection and Innovation (DFPI) has issued a desisit and refrain order to crypto lender Celsius.
The DFPI had ordered BlockFi and Voyager to stop their offerings in the state.
The order means Celsius should stop all of its further operations on the sale and marketing of securities in the state of California.
The order, published on Aug. 8, claims that Celsius Network and its CEO, Alex Mashinsky, made material misrepresentations and omissions in the offer of crypto interest accounts, particularly in understating the risks of depositing digital assets.
According to the Department, the unmentioned risks include the risk that third-party custody services might lose access to digital assets; the risk that lenders would be unable to return Celsius’ collateral on time; the risk that in the event of a sudden request for withdrawals Celsius wouldn’t possess adequate assets to meet customer withdrawal demands.
Celsius is also being accused of non-qualifying the deposited digital assets as securities in compliance with California legislation.