US Crypto Lender Celsius to Stop Paying Interests to Unaccredited Investors
In line with regulatory demands, American crypto lender, Celsius has shared details of a restructuring to its Earn product which will now be limited to only Accredited investors.
As announced by the company, the new regime will come into effect from April 15, and users with existing funds in their Earn accounts will continue to earn interests as long as the funds remain in such accounts.
The new move implies that new retail investors will not be able to access the Earn program. However, those accredited investors permitted by law to participate in securities offerings irrespective of the risks will be able to access the Earn product continually.
The announcement of this product change stems from broader concerns across states and was accompanied by the launch of the Celsius Custody solution for users in the United States. Through this new provision, users who do not qualify for the Earn product will still be able to “navigate across Celsius’ products, including store, access, borrow, spend, earn and grow,” in a secure manner.
“All coins transferred to Celsius by users in the United States prior to April 15, 2022, will continue to earn rewards. Those existing coins will continue to earn rewards for as long as they remain in their Earn accounts,” the announcement reads, adding that new “transfers made by non-accredited investors in the United States will be held in their new Custody accounts and will not earn rewards. Non-accredited investors can continue to swap, borrow, and transfer within their Custody accounts based on their local jurisdiction.”
SEC and the Frown at Crypto Earn Products
The United States Securities and Exchange Commission (SEC) is undoubtedly highly concerned with crypto exchanges looking to offer products that will make their customers earn interest on digital currency holdings. The commission largely sees these kinds of offerings as securities that are deemed unsuitable for most retail investors.
In a related move, Nasdaq-listed cryptocurrency exchange Coinbase Global Inc had to abandon its proposed LEND product for fear of crossing paths with the regulator who threatened to sue if it proceeded with the offering back in 2021.
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