Investigation on Voyager and Celsius Intensifies By The US State Regulators

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Texas and Alabama securities regulators are expanding their inquiries into Voyager and Celsius. Voyager’s disclosure of the manner in which it used customer funds is currently being looked into by the Texas State Securities Board. Earlier inquiries by the same regulators, however, were primarily concerned with each company’s choice to halt withdrawals.

According to a Bloomberg article on Friday, securities authorities in Texas and Alabama are deepening their inquiries into the cryptocurrency loan companies Celsius and Voyager. As disclosed in the reports, the two states are looking into whether Voyager and Celsius completely provided information about their loans and the creditworthiness of the consumers.

Several companies may not have disclosed what they were doing with investors’ money, including the level of risk they were taking and the kinds of transactions they were engaging in, according to Joe Rotunda, director of enforcement at the Texas State Securities Board, who spoke to Bloomberg.

What happened and why it happened ?

According to Amanda Senn, chief deputy director at the Alabama Securities Commission, the regulator was looking into these companies and “trying to figure out what happened and why.” Senn said that the inquiries were only just beginning, “but we have a responsibility on behalf of our investors in our states.”

The interest-bearing crypto deposit offerings from Celsius were allegedly unregistered securities in September, according to Texas and Alabama regulators.

On June 12, Celsius stopped allowing withdrawals, and ever since then, client funds have been frozen. The business has retained legal and financial advisors to investigate restructuring possibilities.

This week, Voyager filed for Chapter 11 bankruptcy protection. Due to the company’s decision to stop withdrawals last week when its counterparty, the troubled hedge fund Three Arrows Capital, failed to repay a $650 million loan, funds belonging to Voyager’s clients are also still trapped.