The California Department of Business Oversight (DBO) has reportedly ordered crypto-backed lending platform MyConstant to stop offering and advertising its services in the state. According to a report published by local news outlet ABC10, DBO issued a cease and desist order against MyConstant. The order is based on an investigation by the agency that found that the company is offering loans without being licensed as a financial institution under California law.
California regulators have reportedly ordered crypto-backed lending platform MyConstant to cease offering and advertising its services in the state.
According to a report from Bloomberg published on Monday, the California Department of Business Oversight (DBO) sent a letter to MyConstant last week ordering it not to offer or advertise its cryptocurrency-backed loans in California.
MyConstant Asked To Stop Transactions
The DBO did not specify why the platform was being targeted, but it is likely that regulators were concerned about whether these companies were adequately protecting consumers’ money while they are waiting for their loan payments to be processed. The agency also noted that companies operating in California must register with them if they handle non-securities cash transactions valued at $5 million or more per year as part of their business model.
If you’re a California resident who used MyConstant’s services, this is likely bad news. Since the platform was providing loans in US dollars and not using cryptocurrency as collateral, it’s also possible that users won’t be able to recoup their losses.
While it is true that MyConstant had a B- rating with the Better Business Bureau at the time of writing, there have been no complaints registered against them in the past three years. If anything goes wrong with your loan transaction, though—and especially if you’re not planning on making payments on time—you should contact your lender immediately to discuss your options.
