Published January 31, 2023, 05:03 PMUpdated January 31, 2023 5:14 pm.
In the crypto tragedy that unfolded last year, Celsius played a leading role. A report released on Tuesday about the digital asset-rewarded loans and savings company alleges serious violations and mentions its former boss, Alex Makhinsky. The document was ordered by American justice as part of an investigation into a company that was declared bankrupt this summer after withdrawals were suspended. Its fall was accompanied by a drop in bitcoin of about 33% between June and July.
One of Investigator Shoba Pillay’s most striking claims concerns what amounts to market manipulation. According to Reuters, which reviewed the 700-page report, the company artificially propped up the price of its native CEL token: Celsius would have purchased the equivalent of $558 million. On the other hand, Alex Mahinsky would have been sold for over $68 million between 2018 and 2022.
double talk
The latter is suspected of deliberately embellishing the situation with investors, especially in live broadcasts. The transcripts of his speeches were then edited, and the most misleading passages about Celsus’ financial situation were removed. “Behind the screen, Celsius did not run its business the way it advertised to its customers,” writes Shoba Pillay.
This is far from the end of the surprises, it is also about the fact that a third of the platform’s institutional portfolio was not protected from the high risk of capital loss, while the company claimed to invest money in smart products such as bonds. Client assets would even serve as collateral for their own loans.
Tax person until 2021
Another complaint continues to concern mining activities, which are subject to “significant violations of tax laws.” Celsius will be $23 million behind in taxes in this branch dedicated to verifying cryptocurrency transactions alone. It must be said that the centralized financial platform, created in 2017, did not hire anyone to verify the correctness of declarations until 2021. Although she was belatedly aware of the problem, she did not have time to resolve his situation before declaring herself bankrupt. .
Celsius still has over 100,000 lenders waiting to get their funds back. The company’s lawyer raised the issue of resuming its activities under the supervision of the authorities. This will focus on issuing a new internal token, which will therefore be subject to platform valuation and will serve to better compensate stakeholders. The advantage of this solution is that it does not liquidate assets that have completely or partially lost their value. He was accepted by New York bankruptcy judge Martin Glenn, Bloomberg reported last week. But will this be enough to avert fate?