SEC Sues Bankrupt Crypto Lender Celsius, Alleges Misrepresentation of Customer Count and Risky Practices
The U.S. Securities and Exchange Commission has filed a lawsuit against the now-defunct cryptocurrency lender, Celsius. The suit, filed Thursday, also names former CEO Alexander “Alex” Mashinsky as a defendant. Both he and the company stand accused of falsely promising investors a safe investment with high returns.
Bankrupt Crypto Lender Celsius Accused by SEC of Misleading Investors
The U.S. Securities and Exchange Commission has targeted the bankrupt cryptocurrency lender, Celsius, in a lawsuit filed in New York. The SEC accuses Celsius and its former CEO of making fraudulent promises through its “Earn Interest Program.” According to the SEC, Celsius “misled investors about the financial success of Celsius’s business.”
The SEC contends that in June 2022, the defendants’ complex scheme began to collapse, leaving investors unable to withdraw billions of dollars in cryptocurrency assets from Celsius’s online platform. “Defendants made numerous false and misleading statements to induce investors to purchase CEL and invest in the Earn Interest Program,” the SEC lawsuit reveals.
The lawsuit against Celsius follows similar actions targeting Binance and Coinbase. The SEC also disclosed that it settled charges against RSE Markets Inc. on July 12 for operating as an unregistered exchange. The court filing alleges that Celsius engaged in risky trading practices and made uncollateralized loans in an attempt to generate the necessary revenue, thereby putting the entire Celsius enterprise at significant risk. The SEC complaint states:
[Celsius executives] misrepresented Celsius’s financial success to make the company appear more profitable and stable than it was.
The SEC lawsuit arrives as Celsius nears the conclusion of its Chapter 11 process. The company’s mining division is undergoing restructuring, and liquidators have disclosed plans to sell specific altcoins on the open market. The SEC also alleges that Celsius misrepresented its customer count, claiming to have 1 million clients when, in fact, the firm had 500,000 registered customers, many of whom were inactive.
What do you think about the SEC lawsuit against Celsius? Share your thoughts and opinions about this subject in the comments section below.
Source: Bitcoin.com
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