Venture Capital: Crypto Lending Platform Celsius Network Raises $400M
The transaction values the company at more than $3 billion.
Celsius Network, the platform founded by Alex Mashinsky for borrowing and lending crypto, announced its raise of $400 million led by WestCap, a growth equity firm, and Caisse de dépôt et placement du Québec (CDPQ), the Canadian pension fund. (CISION PRNewswire)
The investors were undeterred by recent regulatory heat on crypto loan accounts by authorities in Texas and New Jersey, who alleged that yield-earning crypto accounts at Celsius were tantamount to an offering of unregistered securities.
Crypto exchange Coinbase (NASDAQ: COIN) and lender BlockFi are facing similar regulatory actions regarding yield-bearing crypto products.
“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,” said Alex Mashinsky, CEO, in a statement.
Celsius had assets under management of over $25 billion as of October 8, 2021 (up from $10 billion in Mrch), with more than 1 million customers registered on its platform.
The blockchain-based, fee-free platform offers instant low-cost loans accessible via a web and mobile app to borrowers, as well as a compounding yield service for investors. According to the website, the community can earn up to 17% yield on their crypto.
Buy coins, earn yield, borrow, and transfer with no fees, promises the website.
“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,” said Laurence A. Tosi, Founder and Managing Partner at WestCap.
“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,” he added.
“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,” said Alexandre Synnett, Executive Vice-President and Chief Technology Officer at CDPQ.
Use of funds
Celsius will use the new money to expand its product lineup, double its workforce, and to expand globally through strategic acquisitions.
Related Story: Celsius Network’s Assets Under Management Up 10X In 2020
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