According to the claims, MyConstant violated the California Consumer Financial Protection Act and the California Regulations.
MyConstant, a cryptocurrency lending platform, has been ordered by the California Department of Financial Protection and Innovation (DFPI), which regulates a wide range of financial services, enterprises, goods, and professions in the state, to cease providing certain crypto-related services.
A press release from December 21 says that the DFPI investigation found that MyConstant broke the California Consumer Financial Protection Law and the California Securities Law.
DFPI told MyConstant to “stop” offering its “peer-to-peer lending business and interest-bearing accounts.”
DFPI believes MyConstant breached California Regulations when it sold its “Loan Matching Service” MyConstant allegedly engaged in “unlicensed loan brokering” because it lacks a lending license.
Regulators didn’t like MyConstant’s fixed-interest crypto assets. The constant said crypto-asset accounts with interest will have a “determined annual percentage yield.” Interest-bearing fiat accounts gave a “set annual percentage return.”
When MyConstant issued or offered non-exempt or non-qualified securities, DFPI stressed that the institution only found a few problems.
The California Department of Fair Political Practices investigated MyConstant on December 5. The government looked at investigating crypto-lenders since they lacked a California business license.
DFPI also said it gets information from investors who lost money because of MyConstant.
In September, California was almost ready to pass a law that would have regulated crypto. But California Governor Gavin Newsom said that “a more flexible approach is needed” to make a law that will change as quickly as technology and protect consumers.