Celcius co-founder and former CEO Alex Mashinsky said in a May 2 court filing that he was defending the New York Attorney General’s charges against Celsius Arne. said the account was not a security.
New York Attorney General Classifies Celsius Arne Accounts as Securities
among them filingNew York Attorney General Letitia James argued that Celsius Ahn’s accounts were securities under the Martin Act.
According to the regulator, “investors deposited cryptocurrency assets with Celsius in the hope of receiving promised returns from Celsius’ efforts to deploy the investor’s pooled assets.” These accounts were securities.
mashinski is against it
But machine ski argued Bankrupt lender Earn Products could not be classified as a security under the Martin Act or Howie’s test. That’s it.
Mashinsky argued that the complaint could not sue the company in general, stating that “earn account holders’ wealth was based on a pre-determined rate and was not dependent on Celsius revenue generation. ‘ added.
The former CEO further said that regardless of whether Celsius succeeded or failed to deploy the asset, account holders received the same guaranteed interest payments on their accounts.
In support of his argument, Mashinsky cited various precedents in which courts have held that an “investment contract” does not exist when a prescribed interest rate is involved.
Celsius Earn’s account allowed investors to deposit digital assets on the platform and earn interest of up to 18% per annum. The New York Attorney General said the program is a “flagship product” for bankrupt lenders.
SEC Targets Cryptocurrency Companies Offering Interest-Bearing Products
Under Chairman Gary Gensler, the U.S. Securities and Exchange Commission (SEC) is targeting more cryptocurrency companies that offer interest-bearing products.
Financial regulators have charged Gemini and Genesis over the defunct Earn program and fined Kraken $30 million.
The SEC also issued a Wells Notice to Coinbase and fined bankrupt lender BlockFi $100 million on its interest accounts.
Committee in February issued Investor warning about crypto interest accounts. According to financial regulators, the crypto companies that offer this product do not offer investors the same protections as banks and credit unions. It adds that digital assets sent to these companies are not insured.
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