Celsius is "Deeply Insolvent", Says Vermont's Financial Regulator

blockchain.news:

Celsius Network is «deeply insolvent», Vermont's Department of Financial Regulation (DFR) said on Tuesday, adding that the cryptocurrency lender is also not honouring its obligations to customers and creditors as it does not have the assets and liquidity to do so.

The DFR also said that Celsius has been involved in an unregistered securities offering, selling cryptocurrency interest accounts to retail investors including investors in Vermont and the crypto lender also lacks a money transmitter license.

Celsius, until recently was operating largely without regulatory oversight.

The regulator said, «due to its failure to register its interest accounts as securities, Celsius customers did not receive critical disclosures about its financial condition, investing activities, risk factors, and ability to repay its obligations to depositors and other creditors.»

Furthermore, the multistate investigation of Celsius has been joined by the state agency. While, the company's decision to suspend customer redemptions is being investigated by state securities regulators in Alabama, Kentucky, New Jersey, Texas and Washington.

Celsius had positioned itself in the market by promising more than 18% in interest to peoples' holdings who gave it their digital coins. The crypto lender, in turn, lent those coins out, Bloomberg reported.

However, the crypto lender has already begun repaying debts as it continues tackling the potential insolvency issue.

Celsius Network on Monday repaid partial debts to decentralized finance and lending platforms Aave and Compound respectively, Blockchain.News reported citing sources.

According to tracker Etherscan, the crypto lender repaid $78.1 million worth of USDC stablecoin to Aave and $35 million worth of