After going bankrupt and incurring massive losses for investors, the cryptocurrency lending platform Celsius has faced multiple lawsuits, and that is only one side of its troubles as an attorney representing affected clients has made accusations of securities fraud.
Specifically, Dr. Jonathan Levy, whose clients have millions of dollars in assets bound in Celsius accounts, has referred to the Celsius insurance claims as a case of fraud related to offering unregulated securities, Finance Feeds reported on August 16.
As the attorney explained:
“The insurance does not exist. Celsius’ own term of use stated there was no insurance in the boilerplate print. Yet we have Celsius and GK8 claiming insurance in bold print. It is an intentional deception in aid of a billion-dollar securities offering.”
Questionable insurance claims
Indeed, using a web archive tool, Finbold was able to determine that, as of July 5, Celsius had previously had information on its website claiming its assets were insured for $750 million. However, after the firm claimed bankruptcy on July 13, any mentions of insurance mysteriously vanished from the website.
On top of that, Celsius asserted it had insurance through Fireblocks, but the tech platform’s compliance officer denied that Fireblocks had anything to do with the insurance or custodial business itself and that it merely offered custody software to its clients.
Meanwhile, Celsius’ subsidiary GK8 states it has a $500 million…
