A filing made this morning in the United States Bankruptcy Court of the Southern District of New York in the case of Celsius Network is already making the rounds on social media. The filing, made by the Vermont Department of Financial Regulation, effectively outlines a number of state concerns related to unregistered securities offerings and fraud conducted by the crypto firm.
The filing starts off strong by outlining a number of statements made by Celsius CEO Alex Mashinsky that the regulator simples states are “false and misleading claims to investors about .. the company’s financial health and its compliance with securities law.” The regulator then comments that these claims “likely induced retail investors to invest in Celsius or to leave their investments in Celsius despite concerns about the volatility of the cryptocurrency market.”
Here, the regulator outlines multiple comments made by Celsius as well as Mashinsky that it has proven were materially false when they were made. For instance, on June 7, the firm stated within a blog post that the company had “the reserves (and more than enough ETH) to meet obligations, as dictated by our comprehensive liquidity risk management framework.” However financial records from Celsius instead outline that they had a “deeply negative net worth” at the time of the statements, and did not have the assets needed to repay deposits.
This however was one of the most recent false statements made. A…
