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DISTRICT OF COLUMBIA
DEPARTMENT OF INSURANCE, SECURITIES AND
BANKING
IN THE MATTER OF:
Celsius Network Inc.,
Celsius Network Limited,
Celsius US Holding LLC,
Celsius Network LLC,
and Celsius Lending LLC
Respondents.
ADMINISTRATIVE ORDER
ORDER NO: SB-CD-04-22
CONSENT ORDER
PRELIMINARY STATEMENT
WHEREAS, pursuant to the authority granted to the D.C. Department of Insurance, Securities
and Banking (the “Department”) under the D.C. Securities Act of 2000 (D.C. Official Code
§ 31-5601.01 et seq.) and the regulations promulgated thereunder, D.C. Mun. Regs. tit. 26, § 26-B100
et. seq (collectively, the “Act”), the Department conducted an investigation into the securities-related
activities of Celsius Network Inc., Celsius Network Limited, Celsius US Holding LLC, Celsius
Network LLC, and Celsius Lending LLC (collectively, “Celsius”);
WHEREAS, Celsius was a cryptocurrency firm, which, among other services, offered and
sold interest-bearing digital asset accounts called the Celsius Earn Program (“Celsius Earn Program
Accounts”), which allowed clients to earn interest on digital assets;
WHEREAS, state securities regulators (the “States”) conducted an investigation into whether
Celsius Earn Program Accounts involved the offer and sale of unregistered securities by Celsius to
retail investors, among other things;
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WHEREAS, Celsius has reached an agreement with the States to resolve the investigation;
WHEREAS, the Department commenced this matter on October 12, 2022, with the entry of a
Notice to Cease and Desist and Opportunity for Hearing (the “Enforcement Action”) against the
Respondents. The Enforcement Action set forth violations of the Act by the Respondents, specifically
violations of the Act’s provisions related to the offering and selling of an unregistered security and the
making of material misrepresentations and omissions in the offering and selling of a security;
WHEREAS, in light of the fact that the Respondents have agreed to this Consent Order, are
proposing to distribute or manage substantially all of their assets (including all assets of
Celsius Network Inc.), to or for the benefit of their account holders, and are no longer operating Celsius
Network Inc. or any customer-facing business (and will not do so in the future), the Department has
conditionally agreed that although it could have sought a fine of at least $5,000,000, the Department
has instead agreed to refrain from imposing any administrative fines, subject to the reservation of
rights set forth herein;
WHEREAS, on July 13, 2022, the Respondents and certain of their affiliates filed voluntary
petitions for relief under Chapter 11 of the United States Bankruptcy Code;
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WHEREAS, on January 31, 2024, the Modified Joint Chapter 11 Plan of Reorganization of
Celsius Network LLC and Its Debtor Affiliates (Conformed for MiningCo Transaction) [Docket No.
4289] (as may be modified, supplemented, or amended from time to time, the “Plan”) went effective,
and the Respondents emerged from their bankruptcy cases;
WHEREAS, without admitting or denying the Findings of Fact and Conclusions of Law set
forth below, except as to the jurisdiction of the Department over the Respondents and the subject
matter of this proceeding, which are admitted, the Respondents, having been advised of their rights to
counsel, expressly consent to the entry of this Consent Order, which fully resolves the allegations
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In re Celsius Network LLC, No. 22-10964 (MG) (Bankr. S.D.N.Y. 2022) (also available at
https://cases.stretto.com/Celsius).
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against them set forth herein and in the Enforcement Action; and
WHEREAS, the Respondents elect to waive permanently any right to a hearing and appeal
under the Act, D.C. Official Code § 31-5606.02, and any other applicable statutes and regulations,
with respect to this Consent Order.
NOW, THEREFORE, the Commissioner of the Department, as administrator of the Act,
hereby enters this Consent Order:
I. JURISDICTION
1. The Department has jurisdiction over this matter pursuant to D.C. Official Code
§§ 31-5606.02 and 31-5607.01.
II. RESPONDENTS
2. Celsius Network Inc. is a Delaware corporation and the ultimate parent company of
Respondents.
3. Celsius Network Limited is incorporated in England and Wales and wholly owns many
subsidiaries, including Celsius US Holding LLC.
4.
Celsius US Holding LLC is the holding company for Celsius’s subsidiaries in the
United States, and two of its wholly owned subsidiaries are Celsius Network LLC and Celsius
Lending LLC.
5. Celsius Network LLC is a Celsius company incorporated in Delaware and is the
subsidiary that, during certain times relevant herein, provided Celsius’s user-facing services and
activities for customers in the United States.
6.
Celsius Lending LLC is a Celsius company incorporated in Delaware and is the
subsidiary that, during certain times relevant herein, provided consumer fiat and stablecoin loans
secured by cryptocurrency deposits to Celsius’s customers in the United States.
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7. Celsius is a network of affiliated financial services companies that generate revenue
through cryptocurrency trading, lending, and borrowing, as well as engaging in propriety trading,
mining, and other types of transactions.
8.
The Respondents are not presently registered, and they have never been registered, in
any capacity with the Department.
III. FINDINGS OF FACT
Celsius’s Business Operations
9. Respondents, in part, funded their lending operations, proprietary trading, and other
revenue generating activities through the sale of unregistered securities in Celsius Earn Program
Accounts.
10. Investors invested in Celsius Earn Program Accounts through Celsius’s website or
smartphone application.
11. Investors opened accounts by transferring eligible cryptocurrency to Celsius to invest
in Celsius Earn Program Accounts.
12. Celsius used investors’ cryptocurrencies by commingling cryptocurrencies with
cryptocurrencies deposited by other investors, investing in traditional financial assets and
cryptocurrency assets, lending those cryptocurrencies to institutional and corporate borrowers, and
engaging in any other activities at Celsius’s discretion.
13. In exchange for customers’ investments, Celsius promised lucrative interest rates.
14. Celsius set the interest rates it paid on various cryptocurrencies in advance and on a
periodic basis. Celsius set its interest rates based on various considerations and prioritizing Celsius’s
need for particular types of cryptocurrencies.
15. Celsius incentivized smaller investors to invest in Celsius Earn Program Accounts by
paying higher rates of interest on smaller investments of principal for certain cryptocurrencies.
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16. The accrual of interest began as soon as any funds were credited to an investor’s Celsius
account.
17. In the United States, interest payments were generally denominated in the same type of
cryptocurrency originally invested.
The Lack of Registration and Public Protections
18. The Respondents were not licensed, registered, qualified, or notice filed with the United
States Securities and Exchange Commission.
19. The offering of Celsius Earn Program Accounts was not registered with the Department
or any other securities regulatory authority, nor was it exempt from registration.
20. Celsius failed to disclose to investors in Celsius Earn Program Accounts that Celsius
Earn Program Accounts were not registered by federal or state securities regulatory authorities.
21. The deposits contained in Celsius Earn Program Accounts were not protected by the
Securities Investor Protection Corporation (“SIPC”), insured by the Federal Deposit Insurance
Corporation, or insured by the National Credit Union Administration. This lack of a protective scheme
or regulatory oversight subjected the investors in Celsius Earn Program Accounts to additional risks
not borne by investors who maintain assets with most SIPC member broker-dealers, or with banks,
savings associations, or credit unions.
The Undisclosed Risks
22. Celsius failed to disclose material information necessary for investors in Celsius Earn
Program Accounts to make an informed decision, including critical material information about the
risks associated with purchasing its unregistered securities.
23. Celsius failed to disclose to investors in Celsius Earn Program Accounts certain
material facts regarding the risks associated with its unregistered Celsius Earn Program Accounts.
IV. CONCLUSIONS OF LAW
24. Paragraphs 1 through 23 are incorporated by reference as though fully set forth herein.
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25. Celsius Earn Program Accounts were securities as defined in D.C. Official Code
§ 31-5601.01(31).
26. The Respondents’ offer and sale of securities in the District of Columbia that were not
registered or permitted for sale in District of Columbia violated D.C. Official Code § 31-5603.01 and
§ 31-5605.01.
27. The Respondents committed fraud, in violation of D.C. Official Code § 31-5605.02.
28. The foregoing violations of the Act set forth above provide the basis for this Consent
Order pursuant to D.C. Official Code § 31-5606.02.
29. This Consent Order is appropriate and in the public interest, pursuant to the Act.
V. ORDER
NOW THEREFORE, pursuant to D.C. Official Code § 31-5606.02, it is hereby ORDERED
that:
A. This Consent Order fully resolves the matter commenced by the Department on
October 12, 2022 with the entry of the Notice to Cease and Desist and Opportunity for
Hearing against the Respondents.
B. Respondents shall cease and desist from engaging, directly or indirectly, in conduct
constituting or which would constitute a violation of the Act or any regulation or order
under the Act, including, without limitation, offering or selling securities in this jurisdiction
in contravention of the Act; provided, however, that nothing in this Consent Order shall
restrain or enjoin the deposit, exchange, distribution, investment or withdrawal of assets
owned or held by the Respondents and being administered in accordance with the United
States Bankruptcy Code and orders of the court in the Respondents’ bankruptcy.
C. The Department shall not impose any administrative fines so long as the Plan is fully
administered as proposed; provided that if the Chapter 11 Cases are closed, dismissed, or
otherwise concluded, in each case, without the Respondents’ bankruptcy estates being fully
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administered in accordance with the Plan and the Bankruptcy Code, the foregoing
restriction on the Department shall be lifted, and all of the Department’s and Respondents’
respective rights are reserved as to the amount of any fines.
D. This Consent Order shall be binding upon the Respondents with respect to the provisions
above and all future obligations, responsibilities, undertakings, commitments, limitations,
restrictions, events, and conditions.
Upon execution by the Commissioner of the Department, this Consent Order fully resolves the
Enforcement Action as to the Respondents. The Department further acknowledges and agrees that
any remaining pre-Effective Time
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claim (as defined in section 101(5) of the Bankruptcy Code)
against Celsius that relates to or arises out of this Consent Order or the conduct described in
paragraphs 9 through 23 shall be treated as a State Regulatory Claim under Celsius’s Plan.
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As part of this Consent Order, the Respondents agree that they: (i) will not take any action or
make or permit to be made any public statement denying, directly or indirectly, any allegation in this
Consent Order or creating the impression that this Consent Order is without factual basis; and (ii) will
not make or permit to be made any public statement to the effect that the Respondents do not admit
the allegations, without also stating that the Respondents do not deny the allegations. If the
Respondents breach the agreement set forth in this paragraph, the Department may vacate this Consent
Order. Nothing in this paragraph affects the Respondents’ (i) testimonial obligations or (ii) right to
take differing legal or factual positions in litigation or other legal proceedings.
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“Effective Time” shall have the meaning ascribed to it under the Plan.
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“State Regulatory Claim” shall have the meaning ascribed to it under the Plan.
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This Consent Order should not be interpreted to waive any (i) criminal cause of action,
(ii) private cause of action that may have accrued to investors as a result of the activities detailed
herein, or (iii) other causes of action that may result from activities of a Respondent not detailed in
this Consent Order.
ENTERED, this the ____ day of ___________, 2024.
___________________________
Karima M. Woods, Commissioner
Respondents Celsius Network Inc., Celsius Network Limited, Celsius US Holding LLC, Celsius
Network LLC, and Celsius Lending LLC consent to the terms of the above Consent Order:
By: ________________________________ Date: _______________________________
Christopher Ferraro, Plan Administrator
Reviewed by Counsel for Respondents:
By: ________________________________ Date: _______________________________
NAME: Christopher S. Koenig
TITLE: Counsel for Respondents
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June
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