Celsius Receives Another Ponzi Allegation From Vermont’s Financial Regulator

A financial regulator in Vermont has all but said that bankrupted Celsius Network LLC resembled a Ponzi scheme at times, alleging the crypto lender had used new investor funds to repay previous investors, as well as misled investors about its financial health and bolstered its balance sheets by using its CEL token.

These claims were made by the Vermont Department of Financial Regulation in a filing on Wednesday in support of the U.S. Trustee’s Office motion to appoint an independent examiner, due to alleged concerns over Celsius’ financial transparency amid ongoing bankruptcy proceedings.

“This shows a high level of financial mismanagement and also suggests that, at least at some points in time, yields to existing investors were probably being paid with the assets of new investors,”

The filing said.

The petition claims that Celsius was unable to pay investors back as far as July 2021, when the business sustained large losses that it then attempted to conceal.

In order to improve its balance sheets, the corporation is also accused by regulators of increasing its holdings and manipulating the price of its CEL token.

After months of uncertainty due to the crypto industry’s fallout from the multi-billion dollar failure of algorithmic stablecoin project Terra/Luna, Celsius filed for Chapter 11 bankruptcy in the Southern District of New York in the middle of July.

This comes after Celsius co-founder Daniel Leon declared his whole stock stake in the company to be “worthless” in a document submitted to the US Bankruptcy Court on Monday.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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