The California Department of Financial Protection and Innovation (DFPI) ordered MyConstant to cease providing crypto-related services to its Californian clients.
At the beginning of December, the DFPI announced it will launch an investigation into MyConstant. The regulator added that MyConstant lacks the necessary licenses to operate in California.
The DFPI has now accused MyConstant of violating the California Securities Law by offering peer-to-peer (P2P) loan brokering services. The DFPI noted that the fiat and crypto interest-bearing accounts offered by MyConstant qualified as non-exempt securities. As a result, the DFPI has ordered the lending platform to stop operating in California.
Over the last few months, the DFPI has taken an aggressive stance toward regulating crypto platforms. In July, the regulator issued similar cease-and-desist orders against BlockFi and Voyager.
Referring to these developments, DFPI Commissioner Clothilde Hewlett said regulating platforms that offer unregistered yield-bearing accounts will help in enforcing investor protections.
Meanwhile, MyConstant is one of many firms affected by the bearish crypto markets. On November 17, MyConstant announced that it will suspend crypto deposits and withdrawals. In its latest update, the crypto lender said it will continue to administer crypto-backed loans.
