Celsius’ Independent Examiner Reveals Astonishing Facts About Internal Discrepancies

Celsius abandoned its promise of transparency from its start, according to former prosecutor Shoba Pillay who was appointed as an independent examiner by United States Bankruptcy Judge Martin Glenn.

In a filing, Pillay stated that the bankrupt crypto firm conducted its business in a starkly different manner than how it marketed itself to its customers in every key respect.

The report claimed that Celsius lacked a sufficient risk management function and was unable to track its financial position or evaluate profitability. It also stated that Celsius and its founder Alex Mashinsky, who is currently facing fraud allegations in the United States, failed to deliver on the lavish promises.

Very Ponzi-Like Operations

The examiner interviewed Celsius employees, including former chief Executive Officer Alex Mashinsky, as well as customers and vendors to the company to address whether it operated a Ponzi scheme. Pillai stated that Celsius inflated its native token CEL’s price “to get the valuations to be able to sell back to the company.”

Celsius acknowledged that customer funds should not be touched to purchase the coins necessary to cover liabilities to other clients. It still went on to use customer deposits to fill the billion-dollar hole in its balance sheet. The company’s justification was that it was posting the customer deposits as collateral to borrow the necessary coins instead of selling them.


ADVERTISEMENT

The proceeds were then used to continue the purchasing of CEL.

In April 2022, Celsius’s Coin Deployment Specialist Dean Tappen himself described the company’s practice of “using customer stablecoins” and “growing short in customer coins” to buy CEL as “very Ponzi-like.” Pillay also asserted that the employees were aware of fund discrepancies but chose to stay silent about it.

Additionally, Celsius never liquidated any of its CEL to address its liquidity needs, even as it scrambled to find liquid assets leading to June 12, 2022, when it paused all customer withdrawals.

While speaking about Mashinsky, a manager of the company was even quoted saying,

“we spent all our cash paying execs and trying to prop up alexs [sic] net worth in CEL token.”

Who’s Coins?

Mashinsky, on several occasions, represented to its current and prospective customers that crypto assets belonged to them and not Celsius using phrases such as “your coins,” “my coins,” or “your crypto.” The exec completely backtracked while being interviewed by the examiner. Instead, he stated,

“100% of the actions are our actions, (the customer) can’t take any action (themselves) on the platform.”

Pillai further stated that Celsius made efforts to later edit some of the erroneous information out of the recorded AMA videos. However, it did not retract or otherwise correct any inaccurate or misleading statements made during AMAs viewed live or before any edits were implemented.

SPECIAL OFFER (Sponsored)
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

You Might Also Like:


.custom-author-info{ border-top:none; margin:0px; margin-bottom:25px; background: #f1f1f1; } .custom-author-info .author-title{ margin-top:0px; color:#3b3b3b; background:#fed319; padding:5px 15px; font-size: 20px; } .author-info .author-avatar { margin: 0px 25px 0px 15px; } .custom-author-info .author-avatar img{ border-radius: 50%; border: 2px solid #d0c9c9; padding: 3px; }

The post appeared first on CryptoPotato

Buy Bitcoin with Credit Card

BitMex Leverage Trading

Automated Trading Bot

Related Posts

Leave a Reply

Bitcoin (BTC) $ 95,839.68 1.12%
Ethereum (ETH) $ 3,352.60 0.17%
Tether (USDT) $ 0.999172 0.10%
XRP (XRP) $ 2.22 0.81%
BNB (BNB) $ 664.67 0.31%
Solana (SOL) $ 186.13 2.19%
Dogecoin (DOGE) $ 0.320785 1.11%
USDC (USDC) $ 1.00 0.17%
Cardano (ADA) $ 0.908688 1.28%
Lido Staked Ether (STETH) $ 3,346.15 0.15%