Credit-focused altcoin project Celsius (CEL) Network said Friday that reward token CEL faces “regulatory risks,” according to the company’s recently updated statements.
Altcoin project faces “regulatory risks”
Celsius (CEL) Network, which allows users to use cryptocurrencies to earn interest in return, faces regulatory scrutiny over its high-yield product offerings, while Celsius Earns Program’s (Celsius Benefit Program) can be “considered a risky investment”. Celsius offers payouts with an annual return percentage of 18%, which is significantly higher than traditional banks among historically low benchmark rates. However, CEL is known to be “open to a wide range of risks”, including cyber theft and key loss, along with other cryptocurrencies.
The crypto lending platform has sharpened its “Risk Disclosures” message recently, He created a section for the high-yield Celsius Income Program, saying that it “could be considered a risky investment” and highlighted the “regulators” among the risks of CEL:
As with other cryptocurrencies, CEL can include thieves, lost keys, It is vulnerable to a wide range of risks, including irreversible transactions and failed chains… The update contains “regulatory risks”.
Celsius has yet to respond to regulatory requests
As we reported on Kriptokoin.com, the company limited its new “Win” program registrations in the US to accredited investors last week. “We are in ongoing discussions with US regulators regarding our Earn product,” he said in an April 11 blog post. Last September, state securities regulators asked Celsius to prove Earn was not an unregistered security. Federal regulators are also said to be investigating Celsius. As with crypto-lending rival BlockFi, no effort has resulted in a settlement or fine.
Crypto lenders to US users have faced a new wave of regulatory scrutiny over the past year. They attract investors with returns that outpace banks. Celsius is offering an annual return payment of 18% at the time of writing. Regulators say these products need more oversight over how companies generate such returns. Celsius did not immediately respond to a request for comment.
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