Today is an admirable day for bankrupt crypto lender Celsius. In addition to being exactly one year since the lending platform filed for bankruptcy, the platform and its former CEO Alex Mashinsky have received a bombardment of indictments. Mashinsky, also the co-founder of Celsius, was also arrested today following an investigation into the company’s collapse.
Black anniversary crypto lending platform
In that respect, it is a pitch-black anniversary for the ravaged platform. Celsius was one of many lending platforms that failed to keep its head above water last year. Among other big names such as BlockFi and Voyager, Celsius was perhaps the most noteworthy. While customers have still not seen a penny of their funds, the platform is now being pursued by the US authorities.
Both American Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have filed lawsuits against Celsius and Mashinsky.
The SEC claims that Celsius and Mashinsky “misrepresented Celsius’s central business model and risks to investors by claiming that Celsius did not make unsecured loans, that the company did not engage in high-risk trading, and that interest paid to investors accounts for 80 percent of sales represented by the company’.
The commission alleges that these claims were false and that this information was hidden from investors.
The fact that Mashinsky has now been handcuffed will be some form of relief for many victims of the lending platform. The US Department of Justice (DOJ) has charged the ex-CEO with fraud and intent to manipulate the market. There it is possible a long prison sentence.
Investigators at the CFTC concluded earlier this month that the bankrupt lender and its CEO had violated regulators’ rules by misleading investors.
The investigation against Mashinsky began after the New York Attorney General indicted him on January 5 for deception and causing billions of dollars in losses.
In the SEC’s indictment, the regulator argues that Celsius’s token, CEL, and its interest rate program ‘Earn’ securitiesor effects are:
In this case, Celsius offered and sold CEL and the Earn Interest Program as securities. Celsius and Mashinsky have never filed or had one in effect with the SEC for offering and selling securities through the Earn Interest Program.”
Some time ago, the financial watchdog also filed charges against Binance and Coinbase for allegedly violating federal securities laws. It also labeled a whole laundry list of altcoins as securities.