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On Thursday, following the U.S. Securities and Exchange Commission (SEC) suing the insolvent crypto lender Celsius, the Federal Trade Commission (FTC) divulged a settlement with the firm and imposed a $4.7 billion fine for “duping consumers.” Nevertheless, the penalty will be deferred to enable Celsius to return its remaining assets to consumers in bankruptcy proceedings.
The now-defunct crypto lender Celsius has incurred a fine from the FTC for allegedly hoodwinking investors and “squandering billions in user deposits.” The company contended that it possessed “more than enough” assets to safeguard customer deposits, but according to the FTC, this was a spurious claim. The platform and its affiliated entities are indefinitely barred from managing customer assets, and three executives have been charged.
Per the FTC, the case against Alexander Mashinsky, former CEO and co-founder of Celsius, along with his fellow co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein, will advance in federal court since they haven’t reached a settlement. The FTC disclosed that these individuals, who held pivotal positions in the company, have opted not to settle the matter extrajudicially.
“Celsius touted a new business model but engaged in an old-fashioned swindle,” Samuel Levine, the director of the FTC’s Bureau of Consumer Protection stated. “Today’s action banning Celsius from handling people’s money and holding its executives accountable should make clear that emerging technologies are not above the law.”
On Thursday, following the U.S. Securities and Exchange Commission (SEC) suing the insolvent crypto lender Celsius, the Federal Trade Commission (FTC) divulged a settlement with the firm and imposed a $4.7 billion fine for “duping consumers.” Nevertheless, the penalty will be deferred to enable Celsius to return its remaining assets to consumers in bankruptcy proceedings.
The now-defunct crypto lender Celsius has incurred a fine from the FTC for allegedly hoodwinking investors and “squandering billions in user deposits.” The company contended that it possessed “more than enough” assets to safeguard customer deposits, but according to the FTC, this was a spurious claim. The platform and its affiliated entities are indefinitely barred from managing customer assets, and three executives have been charged.
Per the FTC, the case against Alexander Mashinsky, former CEO and co-founder of Celsius, along with his fellow co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein, will advance in federal court since they haven’t reached a settlement. The FTC disclosed that these individuals, who held pivotal positions in the company, have opted not to settle the matter extrajudicially.
“Celsius touted a new business model but engaged in an old-fashioned swindle,” Samuel Levine, the director of the FTC’s Bureau of Consumer Protection stated. “Today’s action banning Celsius from handling people’s money and holding its executives accountable should make clear that emerging technologies are not above the law.”
The FTC’s complaint against Celsius succeeds the SEC lawsuit lodged against the bankrupt crypto lender. “Defendants made numerous false and misleading statements to induce investors to purchase CEL and invest in the Earn Interest Program,” the SEC lawsuit issued an hour before the FTC press release states. In this specific litigation with the U.S. securities watchdog, Celsius is named alongside former CEO Mashinsky.
