Popular cryptocurrency lending platform, Celsius Network, took to Twitter to announce that it has raised $400 million in a new equity funding round. This comes as the United States regulators, especially the Securities and Exchange Commission (SEC), have been increasingly cracking down on cryptocurrency lending. According to the announcement, the funding round puts the valuation of Celsius at ‘more than $3 billion.’
Announcing the fundraising today, Celsius noted that the latest funding was led by Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), and WestCap, an equity firm established by former Airbnb executive, Laurence Tosi.
The backing from major investors comes months after Celsius was drawn into a broad US regulatory crackdown on crypto companies that offers its customers yields on deposits of digital assets. State authorities in Texas and New Jersey stated that Celsius’ yield-bearing accounts amount to an unregistered securities offering.
The $400 million fundraising
According to the announcement, Celsius intends to use the proceeds from this investment to continue expanding its offering and products, as well as building bridges between traditional finance and cryptocurrencies, with specific emphasis on launching institutional-grade products and offerings. It further stated, “Part of the proceeds would also be used to double its team from 486 employees to nearly 1,000 and expand globally through strategic acquisitions in order to continue fueling the exponential growth that it has experienced over the past year.”
The announcement also reiterated that “Celsius recently reported that as of October 8, 2021, total assets crossed the $25 billion thresholds, including more than 1 million customers registered with the platform, having paid more than $850 million in interest to users through its Earn product in just over three years.”
What they are Saying
Alex Mashinsky, CEO of Celsius Network stated, “We are pleased by the response we received from many leading financial investors during this fundraise. The partnership with WestCap and CDPQ puts Celsius in a position to grow and further its mission to leverage blockchain technology to connect and decentralize the traditional finance.”
Laurence A. Tosi, Founder and Managing Partner at WestCap also commented stating, “WestCap and CDPQ believe Celsius is a world-class business in size and scope and will continue to be the leader at the forefront of the industry in regard to innovation and regulatory acceptance. While the current regulatory attention is new, Alex Mashinsky and Celsius’ ethos has long echoed the sentiment regulators are trying to put forth in terms of consumer protections. Celsius is committed to working constructively with regulators to better understand the dynamic crypto space, protect retail customers from fraud and undue risk, and create general consumer knowledge to allow for thoughtful investment decisions.”
Alexandre Synnett, the Executive Vice-President and Chief Technology Officer at CDPQ stated, “Blockchain technology has the potential to disrupt several sectors of the traditional economy. As digital assets grow in adoption, we intend to capture the right opportunities, while working with our partners towards a regulated industry. Celsius is the world’s leading crypto lender with a strong management team that puts transparency and customer protection at the core of their operations. CDPQ and WestCap are eager to partner with them to share our expertise in the FinTech sector as they continue to expand their services.”
Bottomline
Recall that the CEO of Coinbase, Brian Armstrong, had earlier complained on his Twitter page that the United States SEC threatened to sue Coinbase for offering yield services similar to that of what Celsius offers. Although the United States has not commented on the story, it has left many hesitant to invest in crypto yield platforms.
Celsius native token CEL is trading at $5.71, down 2.50% for the day, as of the time of this writing.