California’s Department of Financial Protection and Innovation (DFPI) has ordered crypto lending platform MyConstant to stop offering several crypto-related products for alleged violations of the state’s securities laws.
DFPI Said In a Dec. 21 press release, it ordered MyConstant to “cease and desist” from offering its peer-to-peer loan brokerage service and interest-bearing crypto asset accounts, which it says violates California securities law. California Consumer Financial Protection Act.
DPFI alleged that MyConstant’s provision and sale of its peer-to-peer lending service, known as a “loan matching service,” violated one of the state’s financial codes.
It also accused MyConstant of engaging in “unlicensed credit broking”.
Regulators also took issue with the crypto lender’s fixed-interest-bearing crypto asset products, whereby a customer deposits crypto assets (such as stablecoins and fiat) and is promised a fixed annual percentage of interest income.
It said that MyConstant were examples of the issuance and sale of non-qualified, non-exempt securities.
In July, the regulator said it was investigating several crypto interest account providers to determine whether they “violated laws under the department’s jurisdiction.”
DFPI first announced it was investigating MyConstant in a press release on 5 December says MyConstant is not “licensed” by DFPI to operate in California.
Related: California regulator investigates crypto interest accounts
The latest move comes just a month after the California-based company appeared to have fallen on hard times, announcing on November 17 that “rapidly deteriorating market conditions” had prompted it to withdraw more cash and that it was “unable to operate our business as usual”. .”
At the time the platform limited its business operations, including suspending withdrawals, and “no deposit or investment request will be processed at this time.”
Dec. includes financial overview, liquidation schedule, estimated recovery and next steps. The platform has been providing updates to users on its website, including an updated plan sent to users on the 15th.
At the time, the platform said it would continue to manage its crypto-backed loans, including ensuring borrower compliance, loan repayment, mortgage repossession of borrowers (when their loans are fully paid), and default.