{"id":491102,"date":"2022-09-08T00:53:26","date_gmt":"2022-09-07T21:53:26","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/vermonts-financial-regulator-alleges-celsius-and-its-ceo-made-false-and-misleading-claims\/"},"modified":"2022-09-08T00:53:26","modified_gmt":"2022-09-07T21:53:26","slug":"vermonts-financial-regulator-alleges-celsius-and-its-ceo-made-false-and-misleading-claims","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/vermonts-financial-regulator-alleges-celsius-and-its-ceo-made-false-and-misleading-claims\/","title":{"rendered":"# Vermont&#8217;s financial regulator alleges Celsius and its CEO made &#8216;false and misleading claims&#8217;"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a412697c08bb\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a412697c08bb\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/vermonts-financial-regulator-alleges-celsius-and-its-ceo-made-false-and-misleading-claims\/#%E2%80%9D_Vermonts_financial_regulator_alleges_Celsius_and_its_CEO_made_%E2%80%98false_and_misleading_claims_%E2%80%9C\" >&#8221; Vermont&#8217;s financial regulator alleges Celsius and its CEO made &#8216;false and misleading claims&#8217; &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Vermonts_financial_regulator_alleges_Celsius_and_its_CEO_made_%E2%80%98false_and_misleading_claims_%E2%80%9C\"><\/span>&#8221; Vermont&#8217;s financial regulator alleges Celsius and its CEO made &#8216;false and misleading claims&#8217; &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvZDE1MWY3N2EtMjBlYi00N2FkLWFlMjYtYWQ3NTg1MDQ5Yjk1LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-71846793>The \u200b\u200bVermont Department of Financial Regulation, or DFR, alleged crypto lending platform Celsius Network and CEO Alex Mashinsky misled state regulators about the firm\u2019s financial health and its compliance with securities laws.<\/p>\n<p>In a Wednesday filing with the U.S. Bankruptcy Court in the Southern District of New York, Vermont\u2019s financial regulator <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/cases.stretto.com\/public\/x191\/11749\/PLEADINGS\/1174909072280000000015.pdf\">said<\/a> Celsius and Mashinsky \u201cmade false and misleading claims to investors\u201d which allegedly downplayed concerns about volatility in the crypto market, encouraging retail investors to leave their funds on the platform or make new investments. According to the state regulator, Celsius and its CEO \u201clacked sufficient assets to repay its obligations\u201d despite claiming the firm had enough funds in its reserves to mitigate the risk of insolvency. <\/p>\n<p>The DFR cited company blog posts and tweets from Mashinsky starting in 2021, suggesting that the platform was \u201cprofitable or financially healthy\u201d at a time when it was experiencing \u201ccatastrophic losses\u201d and \u201cfailed to earn sufficient revenue to support returns.\u201d In addition, the regulator said it had learned of credible claims that Celsius and its management team \u201cengaged in the improper manipulation of the price of the CEL token,\u201d using investor funds to purchase additional tokens and pay out many to depositors as interest.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Notwithstanding the extreme market volatility, Celsius has not experienced any significant losses and all funds are safe.<\/p>\n<p>\u2014 Alex Mashinsky (@Mashinsky) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Mashinsky\/status\/1524404645803745280?ref_src=twsrc%5Etfw\">May 11, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n\u201cBy increasing its Net Position in CEL by hundreds of millions of dollars, Celsius increased and propped up the market price of CEL, thereby artificially inflating the company\u2019s CEL holdings on its balance sheet and financial statements,\u201d said DFR assistant <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> counsel Ethan McLaughlin. \u201cExcluding the Company\u2019s Net Position in CEL, liabilities would have exceeded its assets since at least February 28, 2019. These practices may also have enriched Celsius insiders, at the expense of retail investors.\u201d<\/p>\n<p>The financial regulator called for an investigation into Celsius\u2019 alleged manipulation of the CEL tokens\u2019 price, which \u201cartificially inflat[ed] the value of the company\u2019s net position in CEL on its balance sheet and financial statements.\u201d Though Celsius officially filed for Chapter 11 bankruptcy in July, a balance sheet analysis conducted by the DFR suggested the platform may have been insolvent on May 13, if not earlier.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Celsius bankruptcy proceedings show complexities amid declining hope of recovery<\/em><\/strong><\/p>\n<p>Cointelegraph reported on Aug. 16 that Celsius may have been on track to run out of funds by October, with a report suggesting the company\u2019s debt was closer to $2.8 billion against its bankruptcy filing claims of a $1.2 billion deficit. During the bankruptcy court proceedings, Celsius co-founder Daniel Leon claimed his stake in the platform, 32,600 common shares, was effectively \u201cworthless.\u201d On Sept. 1, former Celsius users petitioned the bankruptcy court to allow them a legal remedy to recover $22.5 million in the platform\u2019s custody.<\/p>\n<p><em>Cointelegraph reached out to Celsius and Alex Mashinsky, but did not receive a response at the time of publication.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/vermont-s-financial-regulator-alleges-celsius-and-its-ceo-made-false-and-misleading-claims\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Vermont&#8217;s financial regulator alleges Celsius and its CEO made &#8216;false and misleading claims&#8217; &#8220; The \u200b\u200bVermont Department of Financial Regulation, or DFR, alleged crypto lending platform Celsius Network and CEO Alex Mashinsky misled state regulators about the firm\u2019s financial health and its compliance with securities laws. In a Wednesday filing with the U.S. Bankruptcy&#8230;<\/p>\n","protected":false},"author":1,"featured_media":491103,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvZDE1MWY3N2EtMjBlYi00N2FkLWFlMjYtYWQ3NTg1MDQ5Yjk1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74863,77595,55229,70934,71657],"class_list":["post-491102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrencies","tag-lending","tag-law","tag-regulation","tag-vermont"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/491102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=491102"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/491102\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/491103"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=491102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=491102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=491102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}