New Hampshire is going after two cryptocurrency companies that it says defrauded New Hampshire residents, as regulators continue to wrestle with how to oversee digital assets using legal systems that were created for very different types of investments.

The Secretary of State’s Bureau of Securities Regulation said Thursday it has submitted separate petitions against Voyager Digital Ltd and Celsius Network Inc., accusing them of fraud and selling unregistered securities. Both entered Chapter 11 bankruptcy proceedings in New York last summer; the Bureau has submitted its bankruptcy claims, including seeking restitution for New Hampshire investors.

People who invested in Celsius or Voyager can contact the Bureau of Securities Regulations with questions or concerns:

The basic claim in this case and many others around the country is is that the way the companies convince people to pay for some digital assets such as types of cryptocurrency makes the assets effectively the same as securities such as stocks and bonds, and therefore subject to regulations applied to other financial institutions. That is also the claim behind the federal Securities and Exchange Commission’s case against new Hampshire video-hosting site LBRY, in which customers bought and sold assets called tokens that could rise or fall in value.

Crypto supporters argue that the nature of assets based on the decentralized technology known as blockchain means that many existing financial laws, which were built around central authorities such as banks or stock exchanges, should not be applied. This issue is still unresolved.

New Hampshire alleges that Voyager offered and sold unregistered securities in the form of purported interest-earning accounts. “Voyager claimed investors could earn a high-interest return on these deposits and used them to invest in numerous high-risk transactions. However, Voyager failed to disclose the nature of this risk to its investors. The company is not a licensed, compliant crypto broker with any of the appropriate regulatory agencies in the U.S. nor publicly traded in the U.S. … defrauded investors by claiming it was a publicly traded, regulated company,” the Bureau wrote in a press release. It made similar claims about Celsius.

The Bureau has requested an immediate cease and desist against both companies from fraudulent conduct and selling securities.  It is also seeking restitution of any losses incurred by investors well as the imposition of fines and a bar from future registration.

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