On August 19, 2022, the DFPI issued a notice to Celsius Lending LLC that the DFPI intends to revoke its California Financing Law lender’s license and has immediately suspended its license pending resolution of the revocation action. As a result of a still-ongoing DFPI regulatory exam, the Department accuses Celsius Lending of engaging in over 55,000 violations of the CFL, including making unlicensed loans prior to becoming licensed, engaging in deceptive advertising, making untrue statements to the Commissioner in the course of licensing, contracting for unlawful prepayment penalties, charging excess liquidation charges, and various other illegal contract terms and failures to make required disclosures to consumer borrowers beginning from Day 1 of its licensure in August 2021. Celsius Lending reports to the DFPI that it has already voluntarily ceased new lending activity as of the filing of the company’s bankruptcy petition as of July 13, 2022.

The DFPI’s order seeking the revocation of Celsius Lending’s CFL license comes in addition to the DFPI’s order on August 8, 2022, to Celsius Network and its CEO, Alex Mashinsky, for making material misrepresentations and omissions in the offer of crypto interest accounts and without qualifying those accounts as securities in compliance with California law.

The DFPI licenses and regulates financial services, including state-chartered banks and credit unions, money transmitters, securities broker-dealers, investment advisers, non-bank installment lenders, payday lenders, mortgage lenders and servicers, escrow companies, franchisors and more.