Solomon Samuel 
FTC Sanctions Celsius $4.7B
FTC Sanctions Celsius $4.7BThe Federal Trade Commission of the United States has issued a $4.7 billion sanction against the bankrupt cryptocurrency lender Celsius Network.
Nonetheless, the judgment will be stayed to “permit Celsius to return its remaining assets to consumers during bankruptcy proceedings.”
The 13th of July announcement states that Celsius and its affiliates will be permanently prohibited from “offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets.”
The New Jersey-based company offered consumers a range of cryptocurrency-related products and services, including interest-bearing accounts, personal loans secured by their cryptocurrency deposits, and an exchange.
In its complaint, the FTC alleged that co-founders Alex Mashinsky, Shlomi Leon, and Hanoch Goldstein misappropriated over $4 billion in consumer assets while marketing the platform as a “safe place” for cryptocurrency deposits.
In addition, the FTC alleged that Celsius made $1.2 billion in unsecured loans, falsely claimed to have a $750 million user insurance policy, and could not monitor its assets and liabilities until late 2021. Stating:
“While lying to their customers to keep them from withdrawing their cryptocurrency deposits, Leon, Goldstein, and Mashinsky protected themselves by withdrawing significant sums of cryptocurrency from Celsius two months before the company filed for bankruptcy. Consumers subsequently lost access to their life savings, college funds, and money saved for retirement.”
Even at the beginning of the bear market for cryptocurrencies in 2022, executives allegedly misled the company’s health, according to the FTC. On the same day, Celsius was also sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.
At the same time, the U.S. Department of Justice indicted Mashinsky on seven fraud-related offenses, and he was subsequently arrested. In July of last year, Celsius previously filed for bankruptcy.
