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
  • 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 (1).png

Research

Aave’s revenues have doubled from April lows and are fast approaching all-time highs. With 35% of borrow interest coming from ETH and 55% from stablecoins, Aave is emerging as a powerful proxy as an ETH and stablecoin beta. As looping strategies accelerate growth and Horizon positions the protocol to ride the RWA wave, Aave is shaping up as one of DeFi’s most compelling multi-narrative plays.

article-image

Private testnet aims to deliver low-cost settlement with partners including Visa, Deutsche Bank, and OpenAI

by Blockworks /
article-image

Solana saw $78 million in REV for August

article-image

Lit Protocol’s Vincent is shifting agentic finance from toy demos to production rails

article-image

The new system aims to unify Europe’s fragmented tokenized asset settlement and cut cross-border costs

by Blockworks /
article-image

Tron slashed fees by 60% as Plasma looms, threatening its USDT moat

article-image

The acquisition adds evaluation-based funding to Kraken Pro, giving traders access to capital on performance

by Blockworks /