Saturday, August 23, 2025

NY Attorney General Orders Two Crypto Platforms to Cease Operations Over Unlawful Lending Activities

The regulatory crackdown on crypto trading platforms continues.

On Monday, Attorney General for New York Letitia James barred two crypto lending platforms from operating in the state, while three other companies received letters requesting more information regarding their activities. According to the statement, the two platforms in question— which were initially identified to be Celsius Network and Nexo— had unlawfully provided interest-bearing accounts for users to receive returns on their deposited digital currencies.

In accordance with New York’s Martin Act, lending platforms selling or purchasing instruments that are considered to be securities must register the activities with the Office of the Attorney General. “Cryptocurrency platforms must follow the law, just like everyone else, which is why we are now directing two crypto companies to shut down and forcing three more to answer questions immediately,” she explained in a press release.

Although common virtual currency lending products fall under separate categories as per the Martin Act, the debt instruments offered by Celsius Network and Nexo promised investors a rate of return on their digital currency deposits, which the Attorney General deemed to be classified as securities.

The three other crypto platforms— which were not named— were issued letters requesting additional information regarding their trading activities and products being offered. The information being requested is related to data on loan-to-value rations, lending rates, fees, collateral options, and payout processes.

In an emailed response to Bloomberg regarding the allegations, Nexo claimed that it does not offer its lending products to investors residing in New York, and blocks those users based on their IP address. “It makes little sense to be receiving a C&D for something we are not offering in NY anyway. But we will engage with the NY AG as this is a clear case of mixing up the recipients of the letter,” Nexo said. Celsius, in the meantime, has yet to issue a comment.


Information for this briefing was found via the NYS Attorney General. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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