1: california financial regulators have ordered online crypto loans platform myconstant to desist from offering some of its crypto-related products in the state. the department of financial protection and innovation (dfpi) blocked the platform from conducting the sale of securities in the state, including its flagship lending platform and its interest-bearing accounts. myconstant offered loan brokering services for personal loans made from one consumer to another (known as peer-to-peer lending), via its “loan matching service”, which levied interest of between 6% to 9% depending on the repayment timescale.
2: the action taken by the dfpi occurred in july 2022, and was directed at myconstant, an online crypto loans platform, in the state of california. the dfpi had been warning consumers about the dangers of crypto lending services for months prior to the cease-and-desist order, and highlighted that “some of these companies are preventing customers from withdrawing from and transferring between their accounts.”
3: the dfpi alleged that myconstant was engaging in the sale of unqualified, nonexempt securities without the proper license, and had been doing so since at least 2020. myconstant allegedly targeted these loans to individuals with bad credit and no material assets, and represented to them that there was a “very low” risk of losing their invested capital. the dfpi noted that these providers don’t fall under the same “rules and protections as banks and credit unions, which are required to have deposit insurance.”