Vermont Financial Conduct Authority, or DFR, alleges that crypto lending platform Celsius and CEO Alex Mashinsky misled state regulators about the company’s financial position. and compliance with securities laws
in a filing with the U.S. Bankruptcy Court for the Southern District of New York on Wednesday. Vermont Financial Conduct Authority said Celsius and its CEO “make false and misleading claims to investors” by ignoring concerns about volatility in the crypto market. and encourages retail investors to continue to deposit funds on the platform or make new investments. According to regulators, Celsius and its CEO “lacked sufficient assets to pay off debt,” despite claiming the company had enough in reserves to mitigate bankruptcy risk.
DFR cited a company blog post and tweet from Mashinsky starting in 2021, saying that the platform “Profitable or financially sound” while experiencing Celsius and management team found that Celsius and management team “Participate in price manipulation of CEL tokens” by using investor funds to buy more tokens. and pays a lot of interest to depositors
Ethan McLaughlin, Assistant General Counsel at DFR, said: “With the addition of hundreds of millions of dollars of Net Position in CEL, This increases CEL’s market price and inflates the company’s holdings of CEL on its balance sheet and financial statements. “Excluding the company’s net position in CEL, liabilities have exceeded assets since at least 28 February 2019.”
financial regulators Calls for an investigation into allegations of manipulation of Celsius’s CEL token price, which “falsely increased the value of the company’s net positions in CELs on balance sheets and financial statements.”bankruptcy filingIn the official chapter 11 in July. But a balance sheet analysis conducted by DFR suggests the platform may have gone bankrupt since May 13 or earlier.
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