Land of the free, unless you are not rich: Celsius freezes access to U.S. users

In the words of her Majesty, Queen:

Another one bites the dust

Another one bites the dust

And another one gone and another one gone

Another one bites the dust

Hey I’m gonna get you too

Another one bites the dust

Earlier this year, BlockFi settled claims with the SEC regarding its crypto interest platform’s U.S. user base. Part of this settlement required BlockFi to no longer offer these services to United States residents. There was an exception for U.S. users with funds already in the interest platform, allowing those funds to continue earning interest, but any additional funds could not be added to the interest account.

Earlier this week, Celsius notified its users that this change would go into effect after Friday, April 15, 2022. While this turn of events is not a surprise, it does have one explicit carve out that BlockFi did not advertise: United States accredited investors. Accredited investors already had access to investment options that other investors did not, and now, only they can continue to earn through new funds added to Celsius interest accounts.

Accredited Investors

According to

An accredited investor is a person or entity that is allowed to invest in securities that are not registered with the Securities and Exchange Commission (SEC). To be an accredited investor, an individual or entity must meet certain income and net worth guidelines.

These guidelines, pursuant to Rule 501 of Regulation D of the Securities Act of 1933, require an individual to demonstrate that they meet one of two criteria:

  • A natural person with income exceeding $200,000 in each of the two most recent years (or joint income with a spouse exceeding $300,000) and a reasonable expectation of the same income level in the current year.
  • A natural person who has an individual net worth (or joint net worth with the person’s spouse) that exceeds $1,000,000 at the time of purchase. The person’s primary residence does not count toward the $1,000,000 net worth requirement.

The the primary residence exclusion was added to net worth requirement in 2010 with the Dodd-Frank Act.

On August 26, 2020, the SEC expanded the definition of an accredited investor further by allowing investors who have defined measures of knowledge, experience, or certifications in addition to the existing requirements of income or net worth. These additions include:

  • Individuals who have certain professional certifications, designations, or credentials (including the Series 7, Series 65, and Series 82 licenses),
  • Individuals who are “knowledgeable employees” of a private fund (but are only considered accredited investors with regard to that fund), and
  • SEC- and state-registered investment advisors.

What does this mean?

In theory, limiting certain investments to only accredited investors limits potential risk to more sophisticated investors who better understand those particular investments. However, this rule carries with it more than a few hypocrisies:

First, there is little to no evidence of those having more money being better at investing that money than others. It is easy to imagine someone inheriting over a million dollars and having no idea how to invest, despite meeting the requirements for accredited investor status. However, more importantly, think about someone who worked hard for their money and ran a construction company to earn their high income or high net worth. Why is that person more qualified than someone else, say with a PhD in computer science who gives lectures on the inner workings of cryptocurrencies, to invest in interest-bearing crypto?

Second, why is it wrong for someone to invest their money in a “risky asset,” but it is perfectly acceptable for that same person, who may have a negative net worth, to go bet their entire paycheck (and then some) on black jack at a casino? Many of these rules adopt the theory of loco parentis – in place of parent – where a person or entity takes steps to protect someone like a parent would. Here, the government steps in to protect the poor, unsophisticated investor from himself by denying him access to these riskier investments that have the potential for a large return.

There are several more examples of this hypocrisy of only allowing the rich to play the high-risk, high-reward game of private investment.

The Point

The solution to investing in exciting opportunities is simple in the United States – be rich.

After Celsius no longer allows the non-rich US users to stake crypto, there are few other relatively safe alternatives. The most popular platform remaining for U.S. users to stake crypto is However, this was the least popular between the three: BlockFi, Celsius, and (Note: while Coinbase does allow for some crypto staking, it is not to the extent or with the high rates offered by these other platforms.)

There are smaller exchanges that offer staking services, as well, including SmartFi – a sponsor of Supercross. However, investing with smaller exchanges raises security concerns about their ability to protect your holdings.

Hopefully by the end of the year, BlockFi will receive authorization by the SEC to launch “BlockFi Yield,” which will be a separate interest account for U.S. users.

Until then, get rich.