Crypto Lending Platform Celsius Raises $400 Million
Celsius Network, a cryptocurrency lending platform, has successfully raised $400 million, placing the value of the company now over $3 billion, per the Financial Times.
Despite the lofty figures, Celsius’ chief executive, Alex Mashinsky, is reportedly more excited about the legitimacy the funding round affords the company.
“It’s not the $400 million,” said Mashinksy. “It’s the credibility that comes with the people who wrote those cheques.”
Celsius’ regulatory controversy
The funding round—and its perceived—has come at a time of regulatory controversy for the company.
On September 17, 2021, the New Jersey Bureau of Securities filed a cease-and-desist order against Celsius to stop the company from offering its high-interest accounts to New Jersey customers by the end of October.
On the same day, the Texas State Securities Board ordered Celsius to appear for a hearing on February 14, 2022—the Texas authority has threatened to issue its own cease-and-desist order as well.
Regulators are primarily concerned with Celsius’ crypto interest accounts, which allow customers to receive interest rates that are far higher than at a traditional bank.
BlockFi, one of Celsius’ competitors, is currently being pursued along the same lines. BlockFi received a cease-and-desist order from the New Jersey attorney general’s office in July of this year, followed by a series of additional orders from Texas, Vermont, and Kentucky.
Celsius investors unphased
Despite the regulatory controversy, Celsius’ investors do not appear to be very concerned.
“It’s quite typical for [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,” said Laurence Tosi, executive of WestCap, who led the funding round for Celsius.
“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,” Mashinsky reportedly added.
12 October 2021 13:42