Crypto.com gives some of its users a week to get in good standing

Crypto.com gives some of its users a week to get in good standing

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Like other cryptocurrency exchanges, Crypto.com has set up a cryptocurrency lending program on its platform which has met with some success. However, some exchange customers are no longer eligible for this service due to the application of new regulatory restrictions. They now have until March 15 to repay their crypto loans to the platform. Details in the following.

The exchange will liquidate guarantees for insolvent users after March 15

Crypto.com has just updated the list of countries with restrictions on its crypto lending program. It now includes the US, UK and 38 other countries. As a result, exchange customers who are based in these countries have received an email telling them that a new date has been set for the closing of the loans granted by the platform. Effectively, if users fail to repay their loans by March 15, their collateral will be sold and loan positions will be closed by Crypto.com.

For many observers, the failure of the exchange’s marketing policy is the basis of this change. Indeed, the millions of dollars spent on celebrities responsible for promoting the services of Crypto.com did not convince many people. The strategy came as a surprise to many given that the exchange hasn’t raised much capital from investors unlike many other unicorns in the cryptosphere. Nevertheless, regulatory repression could be the real reason for this decision.

The SEC goes on the hunt for crypto lending programs

Indeed, cryptocurrency lending products have been under regulatory scrutiny for over a year. Several companies in the cryptosphere have also received a security breach notice from regulators in the United States. Last January, Gemini and Celsius offered loan products that were investigated by the Securities and Exchange Commission (SEC). Crypto.com’s decision comes a month after BlockFi was fined $100 million by the SEC for offering unregistered cryptocurrency lending products.

It is therefore very likely that Crypto.com has decided to end its crypto lending program to avoid being sanctioned in turn by the SEC. The latter is actually more interested in the crypto services category because of their similarities to securities.

Source: Cointelegraph

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Avatar of Luc José Adjinacou

Luc Jose Adjinacou

Far from having dampened my enthusiasm, an unsuccessful investment in a cryptocurrency in 2017 only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.

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