On August 19, 2022, DFPI issued a notice to Celsius Lending LLC that DFPI intends to revoke its lender’s license under the California Financing Act and has immediately suspended its license pending resolution of the revocation lawsuit. As a result of an ongoing DFPI regulatory review, the Department alleges that Celsius lending was involved in over 55,000 violations of the CFL, including making unlicensed pre-licensing loans, engaging in misleading advertising and making false statements to the Commissioner in the course of licensing, entering into unlawful prepayment penalties, charging excessive liquidation fees and various other unlawful contractual clauses and failing to make required disclosures to consumer borrowers from day 1 of its licensing in August 2021. Celsius Lending reports to the DFPI that it has already voluntarily halted new lending as of the Company’s filing for bankruptcy on July 13, 2022.
The DFPI’s order seeking revocation of Celsius Lending’s CFL license comes in addition to the DFPI’s August 8, 2022 order to Celsius Network and its CEO, Alex Mashinsky, for material misstatements and omissions in the offering of crypto interest accounts and without qualifying these accounts as securities in accordance with California law.
The DFPI licenses and regulates financial services, including state-licensed banks and credit unions, money transmitters, broker-dealers, investment advisors, non-bank counselors, payday loans, mortgage lenders and servicers, trust companies, franchisors and more.