Securities regulators in Texas and Alabama are in trouble, Bloomberg reports. cryptocurrency credit firms are expanding their investigations into Celsius and Voyager.
The two states are said to be examining information on Voyager and Celsius’ loans and whether they have fully disclosed the creditworthiness of borrowers.
Alabama and Texas Authorities Closely Follow Voyager With Cryptocurrency Companies Celsius
Joe Rotunda, executive director of the Texas State Securities Board, told Bloomberg. Rotunda said the regulator has found that many firms may not have adequately disclosed what they are doing with investors’ funds, including the amount of risk they take and the type of transactions they take.
Amanda Senn, executive vice president of the Alabama Securities Commission, said the regulator is investigating these companies and is “trying to understand what happened and why.”
Adding that the investigations are still in their infancy, Senn said, “but we have a responsibility on behalf of our investors in our states.”
Last September, both Texas and Alabama regulators claimed Celsius’s interest-bearing crypto deposit offerings were unregistered securities.
As we reported earlier, Celsius and Voyager are in financial trouble.
Celsius stopped withdrawals on June 12 and customers’ funds have been blocked ever since. The firm had hired legal and financial advisors to explore possible restructuring options.
Voyager filed for Chapter 11 bankruptcy protection earlier this week. Customers are also unable to withdraw their assets from the platform, as the company has not been able to repay the $650 million debt it lent to Three Arrows Capital.
*Not investment advice.