In Brief:
- Celsius Network received a $400 million equity investment.
- The investment will help convince regulators about Celsius’s credibility as per CEO Mashinsky.
- The funding round valued Celsius at around $3 billion
Celsius Network LLC, a cryptocurrency lending firm, raised $400 million in new equity funding round today, as US regulators continue to tighten their grip on the crypto industry, particularly lending.
Celsius announced the funding on Tuesday, mentioning that it was led by Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), and WestCap, an equity firm run by former Airbnb executive Laurence Tosi.
The proceeds from this investment will be used to expand the firm’s offering and products, with a focus on institutional grade products. Celsius also plans to more than double its workforce from 486 to nearly 1,000 employees and expand globally through strategic acquisitions.
Celsius CEO Alex Mashinsky expressed hope that the new funding would help the industry reassure regulators about the stability of his crypto lending business and expand it into mainstream financial markets. “No, it’s not $400 million.” “It’s the credibility that comes with the people who wrote those checks,” he said in an interview on Tuesday.
“With over $25 billion in assets and over $850 million in yield paid to over 1.1 million users, Celsius has distributed 10x more yield for the cryptocurrency community than any other lender,” Mashinsky further added.
Celsius is now worth more than $3 billion, a significant increase from a $10 million equity funding round last year, which valued the company at $150 million post-money.
This new funding for Celsius Network comes at a difficult time given the current regulatory climate in the United States, with the company receiving a cease and desist order from the Kentucky Department of Financial Institutions, followed by bans from Texas, Alabama, and New Jersey.
If Celsius is found to be at fault, the company claims that the new funding round will demonstrate its commitment to both the Celsius community and regulators. This means that in the future, Celsius will continue to offer long-term yield gains on assets.
Celsius’s problems with US regulators coincide with the country’s broader crackdown on crypto lending. In July, the New Jersey Bureau of Securities issued a cease and desist order to major cryptocurrency lender BlockFi, sparking a wave of similar orders in a number of other states.
