Cryptocurrency News

Celsius Network fined $4.7B by FTC

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The U.S. Federal Trade Commission has issued a $4.7 billion fine against bankrupt crypto lender Celsius Network.

According to the July 13 announcement, Celsius and its affiliate companies will be permanently banned from “offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets.”

The New Jersey-based firm marketed a variety of cryptocurrency products and services to consumers, such as interest-bearing accounts, personal loans secured by their cryptocurrency deposits, and a cryptocurrency exchange. In its complaint, the FTC alleged that co-founders Alex Mashinsky, Shlomi Leon, and Hanoch Goldstein marketed the platform as a “safe place” for consumers to deposit their cryptocurrency while misappropriating over $4 billion in consumers’ assets.

In addition, the FTC accused Celsius of making $1.2 billion in unsecured loans, falsely stating that it had a $750 million user insurance policy and lacking any means of tracking its assets and liabilities until late-2021. Even during the onset of the 2022 cryptocurrency bear market, executives allegedly lied about the well-being of the company, as told by the FTC:

“While lying to their customers to keep them from withdrawing their cryptocurrency deposits, Leon, Goldstein, and Mashinsky protected themselves by withdrawing significant sums of cryptocurrency from Celsius two months before the company filed for bankruptcy. Consumers subsequently lost access to their life savings, college funds, and money saved for retirement.”

This is a developing story, and further information will be added as it becomes available.

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