The Celsius withdrawal freeze is now being investigated by regulators in 5 states, including Texas and New Jersey

• Five states are investigating the Celsius withdrawal freeze, including Texas and New Jersey.
• Celsius stopped customers from redeeming assets on Sunday following a crash in crypto markets.

Five state securities regulators are investigating the Celsius withdrawal freeze as the crypto market crashed, according to Reuters.

The crypto lender stopped customers from redeeming assets on Sunday night, saying it needed to take steps to "honor, over time, its withdrawal obligations."

On Monday morning, authorities in Alabama, Kentucky, New Jersey, Texas and Washington met to begin preliminary discussions and questioning about Celsius' asset freeze.

Regulators are concerned that such a move endangered the financial well being of customers by not allowing them swift access to their assets.

"The inability to access their investment may result in significant financial consequences," Joseph Rotunda, director of enforcement for the Texas State Securities Board, told Reuters.

Alabama's Securities Commission Director said thus far, Celsius had been cooperative with its initial questions from regulators.

Celsius acts as a bank by raking in customer deposits and promising a return of as much as 18% after investing the cash into the crypto market.

The company came under fire in September when state regulators in Kentucky, New Jersey and Texas filed a cease-and-desist order, saying that the platform's products should be registered as securities products.