Celsius gains SEC, CFTC’s heed: Investigation underway

Sahana Kiran
Source – Unsplash

The entire crypto-verse has witnessed the downfall of prominent crypto lenders over the last couple of months. Celsius did not just file for bankruptcy but an array of controversies followed suit. While the crypto lender continues to deal with pressure instilled by its users, a recent filing shed light on the latest developments in the ordeal.

As per the filing, Celsius Network is reportedly being investigated by US government agencies like Commodity Futures Trading Commission [CFTC], the Securities and Exchange Commission [SEC] as well as the Federal Trade Commission [FTC]. The filing further read,

“The number and extent of investigations of the debtors by governmental entities is significant: Celsius is apparently subject to enforcement proceedings or investigations in at least 40 states, in addition to investigations or inquiries involving the federal government.”

Since a majority of Celsius’ customers were considered to be unsecured creditors, the federal government seemed to be taking a keener look into the case. It should be noted that earlier filings note how the SEC, CFTC as well as the FTC had sent out inquiries to Celsius. However now, these agencies were going all in on the case.

Just yesterday, it was brought to light that both CFTC and the SEC were investigating Three Arrows Capital [3AC]. Following multiple attempts by the Singapore government, the US government decided to intervene.

Celsius’s case goes international

The crypto industry has had a fairly difficult time existing in the US. With a slew of regulators, regulating the market has been confusing and challenging. Therefore, in the Celsius bankruptcy case, Chief United States Bankruptcy Judge Martin Glenn revealed that he would be looking overseas for guidance in the case.

The Judge is likely to refer to the UK’s “Digital Assets Consultation Paper.” In a recent filing, Glenn said,

“Many, or pe[r]haps most, cases involving cryptocurrency may raise legal issues for which there are no controlling legal precedents in this Circuit or elsewhere in the United States or in other countries in which cases arise.”