Celsius Network Is Under Investigation For “Ponzi Scheme”

The court assigned an examiner to investigate Celsius Network LLC’s commercial operating model, the Wall Street Journal (WSJ) said. Celsius Network, however, hasn’t responded to the most recent court-appointed investigation, according to the WSJ.

The investigation comes as a bankruptcy judge is trying to determine whether the bankrupt corporation operated as a “Ponzi Scheme.” Greg Pesce, counsel for the creditors’ committee, stated that although there are some justifications for the probe, they are still unsure “whether Celsius Network was a Ponzi Scheme.”

Let me be clear: We are investigating if it is. We are unable to respond to it. Conversely, the bankruptcy firm’s attorneys reiterated that the examiner Shoba Pillay’s inquiry might be “expensive and time-consuming.”

Celsius executives guilty of theft?

After withdrawing $10 million to pay taxes, the founder of Celsius Network, Alex Mashinsky, had $44 million locked in the platform. The withdrawal occurred before the bankrupt company in July frozen its clients’ accounts.

The company’s CTO Nuke Goldstein and co-founder Daniel Leon, however, reportedly removed a staggering $30 million from the site. According to a report on October 19, the defunct cryptocurrency lender is the subject of a federal inquiry in over 40 jurisdictions in the United States.

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