5th Regulator Investigates Beleaguered Crypto Lender Celsius

Alabama, Kentucky, New Jersey, Washington and Texas will be looking into crypto lending platform Celsius

article-image

Source: Shutterstock

share

key takeaways

  • Celsius froze withdrawals of user assets earlier this week, citing market conditions
  • Regulators want to ensure incidents like this do not occur again

Five state regulators have opened investigations into the dealings of Celsius, the cryptocurrency lender now in limbo after suddenly freezing withdrawals due to “extreme” market conditions. 

The Texas State Securities Board unveiled its probe into the company’s activities on Thursday. 

Four states — Alabama, Kentucky, New Jersey and Washington — are set to join Texas, Reuters reported

Officials had been investigating the matter since Monday morning and the situation has been considered a “priority.”

The crypto industry has been under scrutiny since the collapse of the stablecoin UST, which sent shockwaves across the market after it wiped out billions of dollars. This is the second major blow in as many months, leaving digital assets traders, service providers and investors under mounting duress. 

Unlike traditional financial institutions, cryptocurrency lenders are not subject to many risk management and capital disclosures. Their deposits are not government-backed or otherwise insured. 

It’s not the first time that Celsius has made its way into the forefront of regulators’ radars. In September last year, Celsius was given a cease and desist letter by state regulators in Alabama, New Jersey and Texas ordering that its products needed to be registered as securities.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

ETH’s “breakout marks a significant structural shift and clears the path towards…$4,000,” Kraken’s OTC desk noted

article-image

Fiscal dominance isn’t about interest rates and it isn’t about Trump, either

article-image

Firestarter Storage brings decentralized storage and delivery to Solana

article-image

After lengthy closing arguments on Wednesday, the case is now in the hands of 12 jurors

article-image

Analysts cite weak trading volume and regulatory progress as factors

article-image

Builders weigh in on Ethereum’s first decade and the decisions that will define its next one