Celsius creditors accuse Wintermute of helping launder CEL tokens

Through a class action lawsuit, Celsius’ creditors claimed that the company winter mute helped executives of the now bankrupt cryptocurrency lending platform manipulate the price of the CEL token with fraudulent operations.

According to a dated Bloomberg report Friday 23 Junethe creditors recently amended their lawsuit in New Jersey District Court to allege that certain Celsius executives hired Wintermute to participate in wash trade, a term referring to money laundering operations. On a practical level, wash trading involves making it appear that a particular asset is being traded at a higher volume than it actually is.

Thus, Wintermute would have helped the CEO of Celsius, Alex Mashinsky, and the other senior employees of the platform to illegally manipulate the prices of the token CEL in order to profit from it. According to the documents in the legal file, this fraudulent maneuver would have been discovered through internal conversations between Celsius executives, the latter of which, however, were accessible to the public.

It has also been alleged that Celsius executives engaged Wintermute in connection with these inappropriate market making activities from the month March 2021 until Celsius continued to freeze payouts almost a year later, i June 2022. As a reminder, it is a market maker’s mission to contribute to liquidity by indicating the various buying and selling prices of digital assets on exchange platforms.

Moreover, it was also reported that Celsius did not take special steps to prevent inappropriate market making operations as well as fraudulent manipulations. In this regard, Celsius’ creditors state:

“The supposed controls were largely non-existent, and the few that existed did not seek to monitor or protect against laundering attempts. »

These events come as the Fahrenheit Group very recently won the auction to acquire the assets of the Celsius Network. The latter, whose value is estimated at more than $2 billion, includes blocked cryptoassets, a mining unit, but also Celsius’ institutional loan portfolio.

In response to this latest development, the price of the CEL token rose over the weekend with a significant increase of 16.36% over the past seven days, which has driven the price up to $0.1328 according to data from CoinMarketCap. A level that is still very far from the historical peak of the token, whose price gravitated just below the threshold of 8 USD during the month May 2021.

Source: CoinMarketCap

This article does not represent investment advice in any way. The information provided here should not be used as a basis for making financial decisions. Investing in cryptocurrency involves risk and can lead to significant losses. You should only invest what you can afford to lose and do your own research before making investment decisions.


Leave a Comment