
State securities regulators have opened an investigation into cryptocurrency companies that went under water during the recent market turmoil.
As Bloomberg reports, state securities regulators in Alabama and Texas have zeroed in on Celsius and Voyager Digital, two beleaguered cryptocurrency lenders.
According to Texas State Securities Board enforcement director Joseph Rotunda, the watchdog will investigate whether the companies have disclosed exactly how they were handling customers’ money. Regulators will also investigate possible cases of improper risk disclosure.
As reported by U.Today, Celsius abruptly halted withdrawals on June 13 after facing a liquidity crunch.
Meanwhile, Voyager Digital was forced to file for bankruptcy on July 6 because hedge fund Three Arrows Capital did not manage to pay off its $650 million debt.
While Celsius is fighting against bankruptcy, it was recently hit with a lawsuit accusing the firm of orchestrating a blatant Ponzi scheme.