The FTC, DOJ, SEC, and CFTC have filed both civil and criminal charges against the former CEO and executives. The former CEO has been accused of intentionally deceiving consumers by making false claims about secure and available deposits, resulting in cryptocurrency transfers to the platform.
Fraud charges dismissed
Additionally, Mashinsky and Cohen-Pavon have been charged with manipulating the price of CEL token, causing traders to purchase the token at an inflated price and financially benefiting themselves.
In June 2022, Celsius froze withdrawals after assuring customers of high returns on their deposited coins, citing extreme market conditions. The following month, it filed for bankruptcy.
Lawyers representing Argue Mashinsky have recently submitted a memorandum supporting his motion to dismiss FTC charges.
They stated that the allegations do not imply that Mashinsky knowingly made a fraudulent misstatement to obtain customer information from a financial institution, which is necessary to make a claim under the Gramm-Leach-Bliley Act.
Recently unsealed court documents reveal that the DOJ has seized several bank accounts and a Texas home belonging to Mashinsky.
Celsius Network marks massive success
According to court documents filed on July 20th, Celsius Network has reached an agreement with its account holders to accelerate the settlement of over 30,000 claims against the bankrupt crypto lender.
The claims, which total $78.2 billion, include compensation requests for fraud, misrepresentation, and other non-contractual causes that must be addressed before payouts can be distributed.
Rather than resolving these issues, the parties have agreed, subject to court approval, to increase the amount claimants will receive to cover the damages claimed.
The Debtors will need to retain distributions to creditors unless and until those claims are resolved, which could otherwise be paid out under the Plan.
If approved, the Settlement will provide each Account Holder, who does not opt out of the Settlement, with a 5% increase of their Account Holder Claims (other than Custody Claims).
