Celsius Network, the bankrupt crypto asset (virtual currency) lending company, was sued all at once by multiple US authorities on July 13.
US authorities accuse former Celsius Network Ltd. Chief Executive Officer Alex Mashinsky of inflating the price of his company’s cryptocurrency to lure users to the network in order to pad his own pockets to the tune of $42 million.
Prosecutors claim that Mashinsky, who was detained and charged with wire fraud and other offenses, ran a multi-year conspiracy to deceive clients before Celsius folded last year with more than $1 billion in debt. At a hearing on Thursday in New York, he entered a not guilty plea. Reports Bloomberg.
The FTC has fined Meta a record $5 billion in 2019, but Celsius’ settlement is one of the largest in its history and illustrates what the FTC called Celsius and Mashinsky’s continuous deceptions.
The FTC-announced settlement won’t be paid until the corporation can release any remaining consumer assets after filing for bankruptcy.
Celsius’ history of investigations
Celsius has also been an object of investigation previously. Letitia James, the attorney general of New York, had previously expressed interest in the Celsius Network, and in October 2021 she began an investigation into its operations.
The values of cryptocurrencies fell as a result of the chaos the decision caused.
A corporation that lends out cryptocurrency, Celsius Network LLC, was declared insolvent.
The company had its main office in Hoboken, New Jersey, and it conducted business internationally.
Users could invest a variety of digital currencies, such as Bitcoin and Ethereum, into a Celsius wallet to receive a percentage yield and could borrow money by using their digital currencies as collateral.
