Crypto Lender Celsius Says Its CEL Token Faces ‘Regulatory Risks’

Crypto rewards token CEL “is susceptible” to “regulatory risks,” issuer Celsius Network, LLC warned customers for the first time this month.

The crypto lending company sharpened its “Risk Disclosures” messaging in recent days, carving out a section for the high-yield Celsius Earn Program, saying that it “may be considered a risky investment” and highlighting “regulatory” among the risks to CEL.

“As with other digital assets, CEL is susceptible to a wide variety of risks,” including coin thieves, lost keys, irreversible transactions and failing chains, the clause has read (with minor verbiage shifts) since October. The update places “regulatory risks” up there, too.

The company last week restricted new “Earn” program sign-ups in the U.S. to accredited investors.

“We have been in ongoing discussions with United States regulators regarding our Earn product,” the company said in an April 11 blog post. “As a result, there will be changes to the way our Earn product will work for users based in the United States.”

Last September, state securities regulators ordered Celsius to prove Earn wasn’t unregistered security. Federal regulators are also suspected to be investigating Celsius. Both efforts have not resulted either in a settlement or a fine, like the case with BlockFi crypto lending competitor.

In the last year, regulators have been examining crypto lenders in the United States.

They attract customers by offering crypto loans with bank-beating returns. Celsius at press time offered 18% annual percentage yield payouts. These products require more supervision by regulators to ensure that companies are not making such high returns.

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