Celsius Network, LLC, the issuer of the crypto rewards token CEL, has warned customers for the first time this month that the token is vulnerable to “regulatory risks.”
In recent days, the crypto lending company honed its “Risk Disclosures” messaging, carving out a section for the high-yield Celsius Earn Program, stating that it “may be considered a risky investment” and emphasizing “regulatory” as one of the risks to CEL.
As with other digital assets, CEL is vulnerable to a wide range of risks, including coin thieves, lost keys, irreversible transactions, and failing chains, according to the clause, which has been in effect since October (with minor wording changes). The update also includes “regulatory risks.”
Last week, the company restricted new “Earn” program sign-ups in the United States to accredited investors.
“We have been in ongoing discussions with US regulators regarding our Earn product,” the company stated in an April 11 blog post. As a result, there will be changes to the way our Earn product works for users in the United States.
State securities regulators ordered Celsius to prove to Earn was not unregistered security in September. Celsius is also being investigated by federal regulators. Neither effort has resulted in a settlement or fine, as BlockFi, a crypto lending competitor has.
In the last year, cryptocurrency lenders in the United States have faced increased regulatory scrutiny.
They entice customers to lend them cryptocurrency with bank-beating returns; at press time, Celsius was offering 18 percent annual percentage yield payouts. According to regulators, these products require more oversight into how companies generate such returns.
Celsius did not respond immediately to a request for comment.
