Celsius Network, a crypto lending platform, has announced the launch of its new custody solution, alongside an update for its Earn rewards program for users.
According to Celsius Network, it will be barring most of its users from the U.S. from earning crypto rewards, in accordance with new regulatory frameworks imposed by the Securities and Exchange Commission (SEC). Only accredited investors will be able to earn yield from their crypto assets on the Celsius platform. This new policy will begin on April 15th.
"[...] Celsius has been working closely with regulators around the world. It is our intention to be as transparent with our community as possible. More specifically, we have been in ongoing discussions with United States regulators regarding our Earn product," the firm stated in a blog post.
Formed as a response to conversations that Celsius has had with regulators, the new policy will likely affect a large number of users who are actively participating in the rewards program. Once effective, funds added to the platform will be added to the new Custody account which is a non-yield earning account. Further, certain jurisdictions in the U.S. will not be able to use the recently launched Custody service because of specific licensing requirements.
Users outside of the U.S. will still be able to earn and access all of Celsius Network's products and services and will remain unaffected by U.S. regulatory policies. Accredited investors, on the other hand, will need to pre-qualify with a certain level of income or net worth, or asset levels if the applying subject is a business entity. Knowledge and expertise on unregistered securities will also be considered as qualifications for the accreditation process.
These updates were due to a hearing announced by the Texas State Securities Board in September 2021, alongside a cease and desist order issued by the New Jersey Bureau of Securities, in which Celsius was accused of selling unregistered securities.
To date, Celsius Network has over $23 billion in assets under management (AUM) and has paid out over $912 million in yield and rewards since its launch in 2018. Current rates for Celsius' interest-earning product are rated at an 18.63% APY for crypto, with 7.1% returns for major stablecoins.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.