Under SEC Pressure, Celsius Network Follows in BlockFi's Footsteps, Interest Accounts Will Only Serve Accredited Investors in the Future

The lending platform Celsius Network follows in the footsteps of BlockFi by introducing a new "custody solution" to address regulatory pressures, where unqualified U.S. users can no longer earn lending rewards.

"Earn" Stops Servicing Ineligible Users

According to the official announcement, Celsius claims that its earning product "Earn" will undergo the following changes as it continues negotiations with regulatory bodies:

1. Starting 4/15, interest payments to non-qualified U.S. users will cease, existing funds will not be affected.
2. Funds deposited in the "Earn" account before 4/15 will still earn interest.
3. After the expiration of loans before 4/15, the funds will be returned to the "Earn" account and will still earn interest.
4. The new custody solution "Custody" becomes the core product, covering lending, spending, Earn, and other services.
5. Non-qualified U.S. users can also deposit funds into the "Custody" account but will only be able to trade, lend, and transfer funds.

In essence, non-qualified U.S. users will no longer be able to deposit funds into the "Earn" account after 4/15, and funds in the account before 4/15 will no longer earn interest once withdrawn.

Following in the Footsteps of BlockFi

In February of this year, another lending platform, BlockFi, announced the cessation of services to U.S. users, settling with regulatory authorities in various states with a $100 million fine, citing the BlockFi Interest Account (BIA) as the reason for the penalty.

At that time, BlockFi also registered a new product, "Crypto Interest Securities BlockFi Personalized Yield," with the SEC under the 1933 Securities Act to continue serving U.S. users.

Celsius users expressed anger towards this decision, with some claiming they will leave the platform, while most strongly criticized SEC Chairman Gary Gensler, mainly due to the high threshold for "accredited investors" in the U.S.

While the SEC's actions protect ordinary users from the risk of platforms closing without recourse, it is limited to the rules for accredited investors, leading the public to view it as a regulation that perpetuates wealth inequality and indirectly forces retail investors to keep their funds in banks.

According to the U.S. SEC's definition of "accredited investors," individuals must have a net worth of $1 million excluding their primary residence and spouse, with an annual income of over $200,000 in the past two years, or a combined income with their spouse of over $300,000.

As a result, a large community on Twitter mocked, "Thank you, Gary Gensler."