Celsius Network Pulls $400M in Funding Despite Regulatory Concerns

Popular cryptocurrency lender Celsius Network has reportedly raised $400 million from investors despite growing regulatory concerns. As reported by the Financial Times, the latest funding round was led by WestCap, the fund set up by former Airbnb and Blackstone executive Laurence Tosi, and Caisse de dépôt et placement du Québec (CDPQ), Canada’s second-largest pension fund.

Celsius Chief Executive Officer, Alex Mashinsky noted that he believes the new funding and the caliber of investors will hopefully convince regulators about the viability of his product offerings. In addition, Alex hopes the funding will help showcase the stability of the digital currency offering and power the drive to take the product mainstream.

“It’s not the $400m. It’s the credibility that comes with the people who wrote those cheques,” he said.

Celsius was established in 2017 and initially operated out of the United Kingdom, before relocating its business to the US. The company’s core product involves providing interest-bearing crypto loans, whose liquidity is supplied by both retail and institutional investors. Celsius says it offers as much as a 17% yield on deposited crypto assets.

American lawmakers are against crypto lending products, arguing that they are more related to securities with all of its applicable rules. The SEC stopped Coinbase exchange from exploring similar products, in a bid to avert a lawsuit.

Unfazed by Regulatory Pressures

The Kentucky-based lender has been served a cease and desist order with respect to its crypto lending offerings in the state. Besides Kentucky, Texas and New Jersey have also trailed these paths warning the firm of legal implications bordering on its lending products. This, however, has not deterred interest from the company’s investors who have confidence in the company’s secondary offerings, should regulations restrict the firm from offering the loan products.

“While the current regulatory attention is new, Alex Mashinsky and Celsius’ ethos has long echoed the sentiment regulators are trying to put forth in terms of consumer protections. Celsius is committed to working constructively with regulators to better understand the dynamic crypto space, protect retail customers from fraud and undue risk, and create general consumer knowledge to allow for thoughtful investment decisions,” said Laurence A. Tosi, Founder and Managing Partner at WestCap.

Celsius has, however, maintained that its current products are not in violation of any laws and that it is ready to work with regulators to resolve any uncertainties in its products.

The post Celsius Network Pulls $400M in Funding Despite Regulatory Concerns appeared first on Coingape.

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