In a recent development surrounding the collapse of crypto lender Celsius, creditors have filed an amended lawsuit accusing the company’s executives of engaging in wash trading.
Quick facts:
- Creditors of Celsius have filed an amended lawsuit alleging that executives engaged in wash trading with the help of Wintermute, an algorithmic trading firm.
- The lawsuit claims that Celsius manipulated the price of its CEL token by using fraudulent tactics and engaging in wash trading practices.
- FTX’s involvement in the case was revealed through a subpoena, with suspicions of suspicious trades and wash trading between Celsius and FTX wallets.
According to a report by Bloomberg, the lawsuit now includes algorithmic trading firm Wintermute as defendant. These allegations add to the growing scrutiny faced by Celsius executives, including co-founder Alex Mashinsky, who is already being sued for defrauding investors.
This article delves into the amended lawsuit, highlighting the accusations of wash trading and its implications for Celsius and its stakeholders.
Celsius creditors have amended their existing lawsuit against the bankrupt crypto lender, adding new accusations of wash trading. The lawsuit alleges that Celsius executives collaborated with Wintermute Trading Ltd, an algorithmic trading firm, in engaging in manipulative trading practices.
The lead plaintiffs of the class action lawsuit, representing individuals who suffered losses from purchasing Celsius Financial Products, have included Wintermute Trading Ltd as a defendant in the amended filing.
Additionally, the lawsuit targets senior executives at Celsius, including co-founder Alex Mashinsky, who is separately facing legal action from the New York Attorney General.
The central allegation in the amended lawsuit is that Celsius executives used fraudulent tactics to artificially boost the price of the CEL token. The lawsuit claims that Celsius manipulated the price of CEL by utilizing investor deposits to acquire CEL tokens, thereby increasing their Net Position in CEL.
Wash trading, a form of market manipulation, is specifically highlighted as a tactic employed to inflate market activity without incurring risk or altering market position.
FTX Entangled in Questionable Celsius Transactions
Previously, FTX, a prominent cryptocurrency exchange, was subpoenaed in relation to Celsius transactions. The subpoena revealed the names of the ten largest wallet holders suspected of manipulating CEL token prices.
This revelation occurred when creditors identified suspicious trades after Celsius paused withdrawals before its collapse. A court order issued during Celsius’ bankruptcy proceedings seeks clarification regarding 950 CEL transfers that appear to indicate wash trading between self-custody and FTX wallets.
The amended lawsuit raises serious concerns about the integrity and transparency of Celsius’ operations. If the allegations of wash trading are proven, it could have far-reaching consequences for the company and its stakeholders.
Market manipulation undermines investor confidence, and regulatory scrutiny is likely to intensify. Moreover, with Celsius already facing financial distress and bankruptcy, the lawsuit adds another layer of complexity to the company’s future.
Celsius creditors have intensified their legal battle by filing an amended lawsuit that accuses executives of engaging in wash trading with the assistance of Wintermute.
These allegations of market manipulation add to the mounting legal challenges faced by Celsius and its co-founder, Alex Mashinsky. As the legal proceedings unfold, the outcome of this case will have implications not only for Celsius but also for the broader crypto industry.
The need for transparency, accountability, and regulatory oversight in the cryptocurrency market is underscored by such allegations, highlighting the importance of addressing fraudulent practices to safeguard investor trust and market integrity.
