California Department of Financial Protection and Innovation, cryptocurrency announced that it is actively investigating multiple companies that offer interest accounts.
California Authorities Begin Investigating Cryptocurrency Companies That Have Stopped Withdrawals
In a consumer alert issued today, the regulator said it is examining firms that offer interest-bearing crypto-asset accounts nationwide, including some crypto companies that prevent customers from withdrawing funds from their accounts and making transfers between them.
The department said it is investigating whether companies violate local laws.
In the announcement, California customers of platforms that slow or stop withdrawals were asked to contact the department.
While no firm was named in the announcement, cryptocurrency lending firm Celsius has yet to restart withdrawals and transfers on its platform since it suspended services amid a liquidity crisis last month.
It was reported last Friday that state regulators in Texas and Alabama are expanding their investigations into Celsius and Voyager.
Some cryptocurrency interest accounts are unregistered securities, which is why it has recently taken action against companies like BlockFi and Voyager Digital, the department said in a statement.
According to the department, the purpose of securities records is to provide adequate disclosure to investors. It is now investigating whether other firms can be blamed for the same violations.
The statement released by the department included the following statements:
“Our department is alerting Californian consumers and investors to the possibility that some companies that offer cryptocurrency interest rates may not be adequately informed of the risks.
Crypto interest account providers are not subject to the same rules and protections as banks and credit unions that must have deposit insurance.”
*Not investment advice.