Crypto Lending Firm Celsius Network Raises $400 Million Despite Regulatory Warnings

Celsius Network, a major cryptocurrency lending company, has raised a staggering $400 million in a funding round, despite the company recently receiving multiple warnings from regulators. The Financial Times reported this on October 12:

The funding round was led by WestCap, a fund founded by Laurence Tosi, former director of Airbnb and Blackstone, and Caisse de dépôt et placement du Québec (CDPQ), Canada’s second largest pension fund.

Celsius Network raised $30 million last year in a funding round led by Tether, publisher of the USDT stablecoin. Then the company received a valuation of $120 million, which has now risen to a staggering $3 billion.

The company has grown enormously this year, due to the increase in popularity of loan products with crypto. Celsius says it now manages more than $25 billion in assets, up from $10 billion in March. The company now has over 1 million registered users.

Regulatory Alerts

However, Celsius received multiple warnings from several US states about its loan products this summer. The states of Texas and New Jersey said the securities may be unregistered. Kentucky’s securities regulator last month even sent a so-called cease and desist letter to Celsius.

Celsius itself says all of its operations are in full compliance with US law. Celsius CEO Alex Mashinsky hopes this funding will reassure regulators, saying:

“It’s not the $400 million. It’s the credibility that comes with the people writing those checks.”

WestCap’s Tosi says he’s not worried and has done enough research:

“It’s pretty typical for regulators to survey some industry leaders to clarify their own rules. This is part of the process of regulating a new market.”

BlockFi and Coinbase also recently received such a warning in the US about their lending products. Coinbase has since canceled its loan product. Recently it was revealed that Celsius has a huge loan of $1 billion from Tether.

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