Celsius Spent Over $500 Million Manipulating CEL Token Price And Many Secrets

Key Points:

• A recent court report details and exposes the causes of the demise of cryptocurrency company Celsius.
• Investigation results show that Celsius spent at least $558 million manipulating the price of CEL tokens.
• Going over the credit limit when giving Tether vat billions of dollars also costs it.
• Co-founder and former CEO Alex Mashinsky lied about selling his ownership stake in the company’s token.

The recent court report on the demise of primary crypto lender Celsius has surprised many with its Ponzi scheme. In particular, it was discovered that Celsius spent at least $558 million on price manipulation of the CEL token.

According to The Block, which further summarized the points in a report issued by Shoba Pillay, an independent examiner of Celsius bankruptcy, the crypto lender sold a total of 203 million CEL in the token offering was initially and privately sold in 2018. Still, only $32 million was raised from the ICO instead of the expected $50 million, after which the actual ICO results were not published to the community.

“Despite its promises of transparency, Celsius debated whether to tell its community how the ICO turned out but decided not to do so because it feared its community would be upset,”

The examiner wrote

The report states that Celsius also spent at least $558 million on CEL, a meticulous price manipulation scheme built that involved the sale of CEL tokens in private free trades and the execution of transactions clearing on the open market.

From 2018 through the Petition Date, Celsius transferred at least 223 million CEL from the secondary market to its wallets, a more significant number than the total amount of CEL (203 million) released to the public in the ICO every CEL token in the market at least one time and in some instances, twice,” the examiner wrote.

In the end, that “backbone” of Celsius broke by May 12, 2022, when the price of CEL fell to $0.57.

Additionally, Co-founder and former CEO Alex Mashinsky lied about selling his own stake in the company’s token. Celsius’s CEO withdrew $68.7 million in cash in CEL tokens between 2018 and July last year, despite “repeatedly asserting that he is not a CEL seller.”

Investigators found that Celsius did not have dedicated tax professionals “for the first three years of its existence.” The Celsius miner owes $16.5 million in taxes and may owe more than $6 million. Inconsistencies between tax information and witness statements, among other things. It also found no evidence that Celsius or its business entities “knowingly or knowingly failed to pay tax obligations.”

This news follows yesterday’s announcement that independent verifiers reported that Celsius sometimes uses funds from new customers to pay for other customers’ withdrawals, the usual definition of accounting Ponzi scheme.

14% of Celsius’s institutional loans are entirely unsecured. Celsius did not disclose an $800 million loss from investments in Grayscale, KeyFi, Stakehound, and Equities First Holdings in 2021.

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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