Why was Celsius allowed to operate in America without consumer protections?

It was a financial institution that took customer deposits and lent them out. Why was it not required to be registered as a banking institution?

Like everyone else in DeFi, I’m increasingly curious about the weird world of CeDeFi, and how exactly this dumpster fire ever allowed to exist in the first place. Personally, I got into DeFi years ago because I assumed the Feds would never let crypto exist above ground (this was the prevailing attitude back then, I think.) I was surprised that centralized institutions got as big as they did over time, and I’m still confused how it happened.

View Source

6 thoughts on “Why was Celsius allowed to operate in America without consumer protections?”

  1. Even though you said it, it bears repeating: Celsius was not DeFi, it’s centralized as everything else. It was regulated, but most financial institutions are not banks. The problem is not DeFi, it’s that centralized institutions that handle items of value are capable of such fraud. DeFi fixes this this.

    Reply
  2. They donated to political campaigns. Every single one of these companies easily could have been slapped with cease and desist letters, like do Kwon got, even though his operation was relatively decentralized and run entirely outside of the US.

    Reply
  3. Exactly. I stuck with them in part because they were based in NJ, where they’ve been under scrutiny. So that misled me into thinking they were legit.

    Reply
  4. They got in trouble with the law in the US which was why they removed earn for Americans.

    However you could keep your earn account open but for some reason not add to it or remove anything.

    It was effectively a way to try to keep people from mass exiting and also sort of follow the law.

    Reply
  5. The government can’t be everywhere and do everything. Everyone knows crypto is crap. everyone you know likely warned you .

    There was no reason for the government to control this market .

    Reply

Leave a Comment