Wintermute accused of laundering
Class action by Celsius creditors accuses Wintermuteone of the largest market makers in the cryptocurrency ecosystem, for helping the former president of Celsius to conduct wash trading operations on the CEL token.
A market maker is responsible for setting the buy and sell prices for cryptocurrencies on the platforms he is engaged in, thereby contributing to market liquidity. He is the one who “values the assets”. In the present case, the plaintiffs have asserted Wintermute would have artificially inflated the value of the CEL tokenin particular, presenting it as much more exchanged than it actually was:
“This wash trading activity has corrupted CEL token prices as well as reported trading volume, all in a strategic plan to mislead investors.”
In particular, Wintermute would have carried out such activities in the month of May 2022, after the collapse of Terra (LUNA) and its UST, to maintain the course of CEL.
It also appears from the document submitted to the court that the abuse of which Wintermute is accused was discovered after the publication of internal conversations.
“The supposed controls were virtually non-existent, and those that did exist did not monitor or protect against laundering or self-dealing. »
The connections between Wintermute and Celsius have not been officially established, but according to a tweet from Arkham Intelligence from last month, Celsius has reportedly recently transferred $21 million in Ether (ETH) to the market maker.
According to another tweet from October 2022, Celsius would also have transferred the least $40 million in WBTC at Wintermute in the 3 days before its bankruptcy.
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Celsius about to be taken over
The bankrupt cryptocurrency lender is being acquired by the Fahrenheit consortium, which, if the regulator accepts, will revive its activity with an almost exclusive focus on its mining activity thanks to the support of US Bitcoin Corp, a mining company engaged in takeover operations . In parallel, Celsius would receive between 400 and 500 million dollars in the form of cryptocurrencies.
Celsius had frozen all of its customer accounts on June 13, 2022, shortly before filing for bankruptcy. The creditor class targeting Celsius filed its lawsuit the following monthand amended it this week to add claims about market maker Wintermute.
Wintermute for its part “ categorically denies participating in any wrongdoing “. As for the former president of Celsius, the latter has always denied any wrongdoing while in office.
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Source: Bloomberg