Last month, New Jersey securities regulators ordered cryptocurrency lender Celsius Network (Hoboken) to stop offering paid accounts to customers.
The State Securities Bureau issued a cease-and-desist order in September against Celsius, alleging that it had funded its cryptocurrency lending and proprietary trading operations at least in part through the sale of unregistered securities, in violation of state securities law, said Acting Attorney General Andrew J. Bruck on Sept. 17, when the order was announced.
But Celsius co-founder and CEO Alex Mashinsky denied any wrongdoing during a talk at the Propelify Innovation Festival in Hoboken on October 6 with CNBC senior reporter Jade Scipioni as moderator.
Mashinsky questioned the claims and motivations of regulators.
âThey asked us to show them what we were doing. So we showed them what we were doing. We showed them that it was legal, and showed them that no government has ever granted a monopoly to the banks, âhe said.
âBut they just created a monopoly by buying all the community banks, all the trusts, all the little guys. And then there is no competition.
“And the fees are more than the interest?” And are you still making a deposit with your next paycheck? You give it to them again. So we can’t blame them. We have to blame ourselves. It’s an abusive relationship.
Bruck, in his Sept. 17 statement, said the alleged illegal sales raised at least $ 14 billion for Celsius, which faces similar orders in Alabama, Texas and Kentucky.
âFinancial firms operating in the cryptocurrency market are forewarned,â Bruck said at the time. âIf you sell securities in New Jersey, you must comply with New Jersey investor protection laws. Companies that deal with cryptocurrencies are not immune from surveillance. “
During Propelify, Scipioni asked Mashinsky, âThe problem right now is that there is no federal regulation, is there?
Mashinsky replied, âWe have been following all laws since 2017. We have filed with FinCEN [U.S. Financial Crimes Enforcement Network], we filed with the SEC [U.S. Securities and Exchange Commission]. We do whatever you’re supposed to do, âhe said.
âThe problem is, the banks complain and cry and complain,â Mashinsky said.
âRegulators say, ‘Let me dig in and find something these guys did wrong, so we can stop them.’ This is what is happening.
Scipioni asked, âSo you tell me what it is. But you want more regulation, don’t you? ”
Mashinsky replied, âI don’t want more regulation, I want clearer regulation. I think we all ask. It’s not just me, right?
âWe manage $ 25 billion. If we were a bank, we would currently be the 80th bank in the United States. We are paying $ 860 million in interest. This would make us one of the top 10 interest payment banks in the United States, âMashinsky said.
âThe Federal Reserve tells us the value for money is zero, but the markets, the DeFi market [a virtual currency market], the CFI market [a financial trading market], decentralized finance and centralized finance all tell us the value of money is 8.8%, âhe said.
“How come the banks are making record profits and interest rates are zero?” These people are stealing from you, taking money out of your pocket.
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