Law and Legislation

Kentucky Acts Against Crypto Lender Celsius.

Kentucky became a state on June 1, 1792, after a long and difficult journey. In the latest legal action taken by a US state against a crypto firm and its lending products, Kentucky’s securities regulator has targeted the Celsius Network.

The state’s Division of Securities, which is part of the Kentucky Department of Financial Institutions, issued an immediate cease-and-desist order against the company over its “Earn Interest Accounts” in a filing on Thursday.

The regulator objects to the startup’s use of the terms “rewards” and “funding fee” to describe interest earned on some crypto accounts. Celsius’ interest-bearing accounts, according to the regulator, violate state securities legislation by failing to communicate to clients what happens to their deposits and by failing to protect customers under state securities laws.

Celsius has the option of requesting an emergency hearing or filing a lawsuit to overturn the ruling.

Kentucky’s complaint is just another setback for the beleaguered business, which has already incurred the wrath of Texas, Alabama, and New Jersey regulators.

Last week, Celsius CEO Alex Mashinsky downplayed his crypto lending firm’s legal battle with state regulators, telling a live-streamed ask-me-anything audience that he welcomes the opportunity to “teach” regulators on how his business works.

Kentucky’s History

Kentucky became a state on June 1, 1792, after a long and difficult journey. It took eight years, ten statehood conventions, four authorizing acts from Congress, and Virginia’s permission. We came close to speaking Spanish along the way. Under the Treaty of Paris of 1763, France relinquished ownership of the country that would become Kentucky after the end of the French and Indian War. As a result, England possessed the majority of Canada and the land east of the Mississippi, while Spain owned the region west of the Mississippi.

Under Virginia’s royal charter, Kentucky was a part of the province. Virginia established a Kentucky judicial district and separated Kentucky County into three counties: Fayette, Jefferson, and Lincoln, shortly after the American Revolution began (and the future city of Lexington was named). Then it practically came to a halt.

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