:max_bytes(150000):strip_icc()/GettyImages-1322440587-7d45c7bb2f514e01a3973bb48d75abf7.jpg "The SEC, CFTC and FTC have sued Celsius Networks and its former CEO.")
Bankrupt cryptocurrency lending company Celsius Network and its former CEO and co-founder Alex Mashinsky faced multiple lawsuits Thursday morning from three different US agencies: the US Securities and Exchange Commission (SEC), the Commodity Exchange Commission (CFTC), and the Federal Trade Commission. commissions. . (FTC).
Bloomberg also reported that Mashinsky was arrested and charged with fraud today, according to a person familiar with the matter.
Ronnie Cohen Pavone, an engineer and chief revenue officer, was charged Tuesday in the U.S. District Court for the Southern District of New York with "conspiracy to defraud Celsius Networks customers," according to a previously unsealed indictment.
The company and Mashinski "raised billions of dollars from investors through undocumented and fraudulent offerings and sales of crypto-currency securities," the SEC said in a filing Thursday. They falsely promised "safe, high-yield investments to employers" through their "interest earning" program, which told investors they could earn up to 18% annual returns.
The SEC also stated that the Celsius CEL token and its former interest earning program are securities, adding to the agency's recent position in other filings that certain cryptocurrencies such as BNB, BUSD, SOL, ADA, and MATIC are securities.
Celsius filed for bankruptcy in June 2022, a month after clients' assets were frozen amid turmoil in the cryptocurrency market that saw several crypto companies collapse. In the weeks leading up to the bankruptcy, Celsius executives wrote in an internal letter dated May 21, 2022 that, according to the SEC, "we have no profitable services."
The New Jersey-based startup, valued at $3.25 billion, expanded its Series B funding round to $750 million in November 2021, according to a Chapter 11 bankruptcy filing in New York federal court. He had a capital of 1 to 10 billion dollars. Assets, liabilities and more than 100,000 creditors.
In May, the Fahrenheit consortium announced the acquisition of the assets of Celsius. The group of bidders is led by investment firm Arrington Capital and cryptocurrency miner US Bitcoin Corporation. and Proof Group, Steven Kokinas and Robbie Kaz. As the name suggests, Arrington Capital is led by TechCrunch founder Michael Arrington. Michael Arrington left TechCrunch in 2011.
The Group plans to distribute Celsius' liquid assets to account holders. Illiquid assets such as institutional debt portfolios, mining assets and alternative investments will be managed by a new management team.
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