Celsius Still in Hotspot Despite Repayments and Is ‘Likely Deeply Insolvent,’ Regulator Claims

cryptonews.com:

Crypto turmoil (yes, you guessed it) continues – and one of its key protagonists, the troubled crypto lender Celsius (CEL) remains…well...troubled.

Despite recent attempts to pay off its debts in an apparent bid to get its hands on locked-in collateral, in the United States, the Vermont Department of Financial Regulation (DFR) has issued a scathing consumer alert, where it stated that Celsius is “very likely” to be “deeply insolvent.”

The DFR, which said that some Vermont residents had been affected by Celsius’ decision earlier this summer to suspend withdrawals, added that it believed the firm “lacks the assets and liquidity to honor its obligations to account holders and other creditors.”

The DFR wrote:

“Celsius deployed customer assets in a variety of risky and illiquid investments, trading, and lending activities. Celsius compounded these risks by using customer assets as collateral for additional borrowing to pursue leveraged investment strategies.”

The DFR added that it has joined a “multi-state investigation of Celsius” as a result of its “concerns.”

That probe may or may not be linked to an investigation launched by the Californian Department of Financial Protection and Innovation (DFPI), which says it is now looking into a number of United States-based crypto lending firms.

In a press release, the DFPI refrained from mentioning the names of any of the companies it is looking into, instead stating that it was looking into “multiple” firms.

The department wrote that it thinks these firms “may not have adequately disclosed risks customers face when they deposit cryptoassets”

The DFPI further advised users on how to file formal complaints against crypto lenders if they live in California, and added that it was now