Celsius Network is fighting back against the perception that regulators have cracked down on its operations. The crypto lending company issued a statement this week saying “Celsius is here to say” and “working closely with regulators.” Celsius also clarifies that it did not receive a cease-and-desist order from authorities in New York State. Earlier this […]
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New York Attorney General Letitia James has ordered two cryptocurrency lending platforms to shut down and requested three other platforms to answer questions regarding their activities immediately. The letters to the companies published on the attorney general’s website indicate that the two platforms are Nexo and Celsius Network. New York Cracks Down on Unregistered Crypto […]
Lending firm Celsius raised $400 million, Rari Capital exceeded $1 billion in TVL, and North America witnessed surging crypto volume — all included in this week’s Finance Redefined.
Welcome to the latest edition of Cointelegraph’s decentralized finance (DeFi) newsletter.
In a week where Rari Capital achieved the $1billion TVL milestone, read on to discover why OlympusDAO is yielding four-figure sums on its most popular protocol.
What you’re about to read is a shorter, more succinct version of the newsletter. For a comprehensive summary of DeFi’s developments over the last week, subscribe below.
Cryptocurrency lending platform Celsius Network announced a $400 million equity fundraise this week led by Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) and equity firm WestCap, taking the company’s valuation in excess of $3 billion.
The firm has expressed intentions to utilize the funds in a two-fold strategy: enhance its institutional product and service offering, as well as doubling the workforce to nearly 1,000 employees across the globe.
Celsius Network CEO Alex Mashinsky revealed to Cointelegraph the financial impact the platform is having on the lending sector:
“With more than $25 billion in assets and over $850 million in yield paid to over 1.1 million users, Celsius has distributed 10x more yield for the crypto community than any other lender.”
This funding news coincides with enhanced political scrutiny for crypto lending platforms in the United States. In September this year, Celsius encountered legislative resistance from the Texas State Securities Board and New Jersey Bureau of Securities, which threatened to terminate activity due to the alleged selling of unregistered securities.
Despite this, Celsius has consistently maintained its innocence of wrongdoing and has been willing to communicate and cooperate with regulatory agencies.
DeFi protocol Rari Capital surpassed $1 billion in total value locked (TVL) this week to reach an all-time high of $1.225 billion according to analytical data from ranking platform DeFi Pulse.
The eight-figure total marks a monumental rise from $500 million two weeks ago and just $100 million three months ago. Launched in July 2020, Rari provides an automatic yield optimizing strategy to participants in the DeFi space seeking to secure the highest possible return from their investment.
A number of its liquidity pools have garnered noticeable attention for their lucrative returns, such as the USDC deposits, which offer a 21.67% annual percentage yield (APY), and the Dai pool, which offers 26.43% APY.
Despite these higher-than-average returns in comparison to the industry standard, it has been the OlympusDAO within the Fuse Protocol’s Tetranode’s Locker that has truly stolen the headlines over the past few months.
OlympusDAO is an algorithm-centric rebase model whereby token balances fluctuate over time depending on changes in the token price and the supply in circulation. As of writing, the OlympusDAO sOHM token is yielding a seismic 7,594% APY.
Monthly cryptocurrency transaction volume in the North American region expanded 1,000% over a one-year period from July 2020 to June 2021 by virtue of the flourishing DeFi sector according to data released this week by analytics platform Chainalysis.
The annual Geography of Cryptocurrency Report revealed that monthly volume peaked at $164 billion during May 2021 before descending to $100 billion in June. In addition, DeFi transactions equated to 37% of the region’s total volume at $276 billion.
David Gogel, growth lead at decentralized derivatives exchange dYdX, commented on the findings that the biggest volume recorded was driven by retail consumers:
“Right now, DeFi is targeted towards crypto insiders. It’s people who have been in the industry for a while and have enough funds to experiment with new assets.”
Analytical data reveals that DeFi’s total value locked has increased 8.11% across the week to a figure of $146.89 billion.
Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization performed varied across the last seven days.
Perpetual Protocol (PERP) secured the podium’s top spot with a respectable 29.7%. RenBTC (renBTC) came in second with 6.03%, while Wrapped Bitcoin (wBTC) came a close third with 6.00%.
Analysis and deep dives from the last week:
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.
Six days ago, the securities regulators from New Jersey and Texas cracked down on the cryptocurrency lending platform Celsius. Additionally, the Alabama Securities Commission joined in and filed a cease and desist order against Celsius. Now the state of Kentucky is following suit and has filed a cease and desist order against the crypto lending […]
A news release published by the New Jersey government web portal indicates that the cryptocurrency lending platform Celsius has been sent a cease and desist order from the New Jersey Bureau of Securities. Furthermore, the Texas State Securities Board has ordered Celsius to appear at a hearing and is also threatening with a cease and […]
"Companies dealing in cryptocurrencies are not immune from oversight,” said New Jersey’s acting attorney general Andrew Bruck.
The Texas State Securities Board has filed for a hearing with the potential to impose a cease and desist order against crypto lending firm Celsius Network for not offering security licensed at the state or federal level, while the New Jersey Bureau of Securities has ordered the platform to stop offering and selling interest-earning cryptocurrency products.
According to a Sept. 17 filing, the Texas regulator will be holding a hearing related to allegations thaCelsius Network is offering and selling securities in Texas that are not registered or permitted in addition to not registering as a dealer under the state’s Securities Act. Should the judge accept that the platform’s offerings represented unlicensed securities, Celsius Network may be subject to a cease and desist order.
On the same day, the New Jersey Bureau of Securities announced that it had issued a cease and desist order against Celsius for allegedly “funding its cryptocurrency lending operations and proprietary trading at least in part through the sale of unregistered securities in violation of the New Jersey Securities Law.” According to the state regulator, the platform raised roughly $14 billion from those sales.
“Financial companies operating in the cryptocurrency marketplace are on notice,” said New Jersey’s acting attorney general Andrew Bruck. “If you sell securities in New Jersey, you need to comply with New Jersey’s investor-protection laws. Companies dealing in cryptocurrencies are not immune from oversight.”
The hearing in Texas will be held either online or in-person on Feb. 14. Should the judge grant a cease and desist order, Celsius Network and its affiliates Celsius Network Limited, Celsius US Holding, and Celsius Lending would likely be required to stop offering crypto services in Texas without registering with the state’s securities board or the United States Securities and Exchange Commission.
According to the Texas filing, Celsius held more than $24 billion in digital assets as of Sept. 3, making the company one of the largest in decentralized finance. Its holdings have grown by more than 2,300% since June 2020, when it reported $1 billion in digital assets. In Texas, Celsius Network has more than $344 million in assets under management from more than 9,000 residents and local businesses as of June 9.
Texas’ Enforcement Division of the State Securities Board notified Celsius on May 14 that it may not have been in compliance with the state’s Securities Act. In a Sept. 17 filing, it alleged that the platform’s Earn Interest-Bearing Accounts were in violation of Section 4.A of the Securities Act, saying they constituted “investment contracts, notes, or evidences of indebtedness regulated as securities.”
Related: Texas regulator allows state-chartered banks to hold Bitcoin
The allegations against Celsius are similar to those both state regulators — as well as their peer in Alabama — levied against crypto lending platform BlockFi in July. The company is scheduled to appear at a virtual hearing in Texas on Oct. 13 to discuss imposing a cease and desist order for allegedly illegally funding its crypto lending operations and proprietary trading through the sale of unregistered securities. In New Jersey, the cease and desist order against BlockFi prevented the platform from onboarding new interest account clients in the state.
Cointelegraph reached out to Celsius Network, but did not receive a response at the time of publication.
