A public court filing claimed that bankrupt crypto lending platform Celsius is misleading its customers about its financial health situation.
Celsius is a bankrupt crypto lending platform, which faced fund liquidity outage because of the extreme volatility in the crypto industry. On 12 June, Celsius stopped the withdrawal of crypto assets for the users and later filed for Chapter 11 bankruptcy. This company also operates a token Cel, which is used to distribute among the crypto Investors as a yield reward.
On 7 September, A public court filing claimed that Celsius is trying to mislead its customers via its native token and hidden financial reports.
According to the filing, the team is manipulating the price of Cel token to show the strength of Celsius company, and also the company is trying to maintain the balance sheet with this strategy.
“engaged in the improper manipulation of the price”
This filing was submitted by the Vermont Department of Financial Regulation to favor the demand made by the United States Trustee to appoint an independent examiner to collect new & precise information about the Celsius platform.
This latest filing also claimed that Celsius faced a huge financial loss in the first half of 2021 and also “two material adverse events” in June and July of that year, as per the company’s financial record, but the company never disclosed it to the Investors or customers.
The filing also noted that the company never generated that amount of funds to give yield to the customers for their holdings.
“During the multistate investigation, it has become clear that Celsius, through its CEO Alex Mashinsky and otherwise, made false and misleading claims to investors about, inter alia, the company’s financial health and its compliance with securities laws,” the filing claimed
Earlier this, on 6 September, a Celsius representative lawyer said that the company was offered to accept funds to reconstruct the business and also the company is planning a meeting with the Trustee, which is representing the creditors of Celsius, to clear misunderstanding which is possibly coming out from social media about the backend operations of Celsius platform.