The Crypto Roundup: 14 July 2023 | CryptoCompare.com

Celsius, the now-bankrupt crypto lender, and its former CEO, Alex Mashinsky, are facing a slew of federal charges, stemming from multiple U.S. agencies including the Department of Justice (DOJ), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Federal Trade Commission (FTC).

Federal prosecutors have levelled fraud charges against Mashinsky, accusing him and others, including Celsius’s Chief Revenue Officer Roni Cohen-Pavon, of executing “a scheme to inflate the price of Celsius’s proprietary token, CEL.”

Accusations also extend to the firm’s promotional materials, which allegedly portrayed Celsius as a “modern-day bank,” when according to the DOJ Mashinsky ran Celsius more like a risky investment fund, inadvertently transforming customers into investors in a venture far riskier and less lucrative than implied

Both Mashinsky and Cohen-Pavon were taken into custody on Thursday. Simultaneously, the SEC has launched a lawsuit against the defunct crypto lender and co-founder Mashinsky for alleged securities fraud and other infractions

The SEC alleges that Celsius and Mashinsky dishonestly represented the company’s fundamental business model and risk to investors, falsely claiming that Celsius did not engage in uncollateralized loans, risky trading, and that investor interest represented 80% of the company’s revenue.

The regulatory body contends that these assertions were false, and crucial information was intentionally concealed from investors before Celsius formally declared bankruptcy in July 2022.

Additionally, the CFTC has initiated its own lawsuit, alleging that Mashinsky and Celsius deceived investors and pursued increasingly precarious investment strategies involving multi-million-dollar uncollateralized loans.

The FTC has also reached a settlement with Celsius, forbidding the firm and its affiliates from offering or advertising any service involving user assets.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/jul/14/