• The US Federal Trade Commission has issued a $4.7 billion fine to the bankrupt crypto lending platform Celsius Network.
• The FTC found Celsius and its former CEO guilty of violating several laws while operating in the country.
• The SEC has also filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky over misappropriation of consumer assets.
US Federal Trade Commission Slaps Celsius Network with $4.7B Fine
The US Federal Trade Commission (FTC) has issued the crypto lending platform Celsius Network with a $4.7 billion fine for „squandering billions in user deposits“ after misleading customers into depositing funds. Additionally, the CFTC found the former CEO and Celsius Network guilty of violating several laws while operating in the country.
Misappropriation of Consumer Assets
The judgment issued by the FTC will allow Celsius to return its remaining assets to consumers in bankruptcy proceedings, however, it will be permanently barred from “offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets” per the July 13th ruling. Furthermore, allegations include that co-founders Alex Mashinsky, Shlomi Leon and Hanoch Goldstein misappropriated more than $4 billion in consumer assets while marketing their platform as safe place for users to deposit their cryptocurrencies. In addition to this they are accused of making $1.2 billion unsecured loans and lying about having an insurance policy worth $750 million which did not exist until late 2021 when the bear market began taking effect on their operations..
SEC Files Lawsuit Against Former CEO
Just hours after issuing its judgment against Celsius Network and affiliates; The United States SEC filed a lawsuit against both them and their former CEO Alex Mashinsky for violations such as false advertising regarding their services as well as money laundering risks among other accusations .
Celsius Network Services
Before collapsing under these pressures; Celsius network offered customers cryptocurrency services including interest-bearing accounts, personal loans backed by bitcoin deposits and a cryptocurrency exchange based out of New Jersey where it had it’s headquarters located at.
Final Thoughts
The current legal actions being taken by US regulators have set back many projects which were attempting innovative solutions within cryptocurrency markets but unfortunately ran afoul of established regulations concerning consumer protection among other things . It is now up to others attempting similar projects going forward to take heed of lessons learned from cases like this one so that future entrepreneurs can avoid similar problems .
