Pinned down by US regulators, Celsius Network nonetheless convinced investors and raised $ 400 million.
The threat of legal action by the authorities is likely to scare away investors. The Celsius Network cryptocurrency lending platform obviously does not suffer from this handicap.
The company has indeed just completed a new round of funding, and not the least. Celsius thus raises 400 million dollars. This funding allows it to increase its valuation to more than $ 3 billion.
A disturbing interest account
This is a real snub addressed to regulators in several US states, who blame Celsius for breaches of the law. On the contrary, for its CEO, Alex Mashinsky, this fundraising gives the company credibility.
The New Jersey Securities Office is demanding that Celsius cease all activity with clients in the state by the end of October. Accounts offering a high level of interest are not to the liking of the authorities.
In Texas, Celsius is exposed to the same ban, but at a later date. The company is not the only one to be on the authorities’ radar, however. Its competitor BlockFi encounters the same setbacks.
But obviously, nothing to worry about investors, including WestCap, the main investor of the new Celsius round.
“It is quite common for [régulateurs] are starting to look at some of the market leaders to clarify their own rules. It’s part of the process of regulating a new market”, Relativizes an executive of WestCap.
Alex Mashinsk, interviewed by the Financial Times, wants to be reassuring on the way in which Celsius operates in order to pay its clients substantial interest. In any case, this model overshadows players in traditional finance.
“Under no circumstances do we take client assets to buy more or sell them, because that’s not our business. Our business is to earn yield and… the way we earn yield does not involve trading the asset itself, ”refutes the CEO.
The billion dollar loan granted by Tether in the past, however, fuels doubts as to the sustainability of the Celsius Network business model. However, there is no confirmation that this loan was taken out to pay returns to clients.