California regulator DFPI has sanctioned crypto lending platform MyConstant for violating state securities law.
Regulators globally have tightened their moves towards the crypto industry. After the recent FTX events, the steam of billions of dollars triggered legal processes. Many countries shared a consensus on the rapid regulation of cryptocurrencies. On the other hand, regulators spend a lot of time overseeing and regulating thousands of cryptocurrency institutions. However, an official and full regulation is not yet ready. In the midst of all these processes, DFPI, a regulator from the US state of California, sanctioned the crypto lending platform.
California Regulator Targets Crypto Credit Platform
The California Department of Financial Protection and Innovation (DFPI) has instructed crypto startup MyConstant to discontinue a number of its crypto-related products.
DFPI notified MyConstant that it violated its peer-to-peer loan brokerage service and state law. In this context, the regulator demanded that the platform stop offering interest-bearing crypto-asset accounts.
The consumer protection laws of the US state of California are protected by the DPFI. DPFI cited that the crypto lender violated the Securities Act and the California Consumer Financial Protection Act.
It was also stated that the crypto platform is engaged in unlicensed loan brokerage and this is not considered appropriate.