Celsius will stop signing new deals for crypto borrowers from the US this weekend. All U.S. users can no longer make new deposits for the purpose of earning passive income.
Celsius is one of the industry’s best lenders. Crypto owners can deposit their money in the company and then receive interest.
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However, this does not apply to US users Not anymoreThe cryptocurrency lender will automatically transfer the new deposit from US users to a security account instead of a savings account. Its main feature is that Celsius can do nothing but keep these coins safe.
Importantly, those accounts do not pay interest unless their owners are authorized investors.
Normal interest is still paid on all deposits in current contracts. Currently it is about 5% in Bitcoin.
This move is not entirely surprising. The US Securities and Exchange Commission has already stated several times that all of these do not apply to existing rules.
For example, the New York Attorney General in October sent letters to companies that pay interest on crypto accounts. Nexo, which is not based in the US, closed its doors in February to US customers seeking to earn interest.
Nexo stops paying US customers interest in bitcoin
Competitors like Blackfie are increasingly being scrutinized by US securities regulators. Interest accounts look like bank accounts, but regulators say they do not have FDIC insurance. So, they would actually be bonds just like stocks, bonds and options.
Lenders such as Celsius respond by pointing to the very low returns of the average U.S. savings account as a problem they can solve. Especially when you consider inflation. In percentage terms, this is higher than the interest on savings (in 10Y treasuries).
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