The chief executive of embattled crypto lending platform Celsius (CEL) is reportedly under investigation by a committee representing its users.
A new official mission statement from the committee of unsecured creditors claims Celsius customers were repeatedly misled by CEO Alex Mashinsky about the safety of their funds and the firm’s business model.
“Those claims were echoed by Mashinsky, who repeatedly promised customers in his public videos and messages that their funds were safe, that Celsius had adequate capital reserves and robust risk management protocols, and that users could withdraw their coins at any time.
Celsius’ assurances turned out to be empty and false promises. On June 12, 2022 – less than a week after promising to ‘damn the torpedoes’ – Celsius initiated a ‘Pause’ and halted all account holder withdrawals due to ‘extreme market conditions.’ Celsius, which had previously championed its transparency, then largely went silent…
The Committee has already started this investigation and will work to ensure causes of action against Mashinsky and others are preserved and prosecuted for the benefit of the Debtors’ estate and the Committee’s constituents.”
The nine-page long statement references specific tweets from Mashinsky as evidence.
After halting user withdrawals and filing for bankruptcy, Celsius told customers they could either get part of their funds back in cash or “remain long” by holding their crypto in the platform. There have also been insider reports of CEL token price manipulation.
As efforts mount to reclaim Celsius users lost funds, CEL has enjoyed positive price action. It is up over 20% in the last 24 hours, 40.3% in the last week and 104% in the last two weeks.
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