TechFlow news — According to a court bankruptcy report, cryptocurrency lending firm Celsius failed to disclose an $800 million loss to its customers, while its CEO Alex Mashinsky cashed out more than $68 million.
The bankruptcy examiner stated that by June 2021, one-third of Celsius’ institutional loan portfolio was unsecured, and over half of the collateral was under-collateralized. The report also revealed that in 2021, Celsius incurred $800 million in losses from investments in Grayscale, KeyFi, Stakehound, and Equities First Holdings, but did not report these losses to customers afterward. Additionally, the report indicated that Celsius founder and CEO Alex Mashinsky raised at least $68 million by selling CEL tokens, and Celsius had used equity raised from outside investors to prop up the price of the CEL token.
Earlier today, Shoba Pillay, an independent examiner at the New York bankruptcy court, filed documents on Tuesday stating that Celsius misled its investors and at times used funds from new customers to pay withdrawals for other customers—a hallmark characteristic of a Ponzi scheme.Original link
