Attorney General Letitia James asked two crypto lending sites to close down on Monday for engaging in illegal practices. She also ordered an investigation of three other crypto platforms.
The names of all the companies were obscured in the two documents that accompanied the public statement. However, according to early reports from The Block, the document was labeled as a “Nexo Letter”. Another formal response was labeled as a “Celsius Letter” when it was first published. The alleged errors have been corrected, and the documents have been renamed with generic titles.
For illegally marketing or advertising for trading securities and/or commodities, the two companies, including Nexo, were ordered to discontinue all activity within 10 days. According to the statement, these activities are illegal under New York’s Martin Act, which requires providers to enroll.
Nexo informed Market Insider through email that it does not sell its Earn service in New York, so getting an inquiry for what they don’t sell makes no logical sense. They are also reported to be implementing IP-based geoblocking based. Meanwhile, the three firms, including Celsius Network, have been asked to provide additional details regarding their operations.
Celsius and Blockfi have been under the watchful eyes of regulators for quite some now. Celsius recently raised $400 million in a fundraising round. Their Earn Interest Accounts have come under attack from Alabama, Texas, and New Jersey. Many states have also gone after Blockfi. Regulators are tightening up on these firms to make sure that they do not continue operations in unlawful ways.