The Kentucky Department of Financial Institutions has accused cryptocurrency lending service Celsius Network of selling unregistered securities.
According to the regulator's ruling, Celsius Network's offerings violated state law. The service failed to disclose to customers what was happening with their deposits, the department added.
The company can request an emergency hearing to challenge the ruling or appeal in court.
Previously, regulators in Alabama, Texas and New Jersey made similar claims against Celsius Network. Alex Maszynski, founder of the service, described the authorities' actions as "disappointing". He said the company does not agree with the allegations that it is breaking the law.
As a reminder, authorities in Texas, Vermont, New Jersey and Alabama will check the legality of offering savings accounts from cryptolending platform BlockFi.
The company's CEO, Zach Prince, expressed confidence that the cryptocurrency services would survive despite regulatory pressure at the state level.
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