Independent Examiner’s Report Shows Celsius Was Running A Ponzi Scheme

An independent examiner report has revealed that Celsius used new customer funds to pay for withdrawals. Celsius operated a riskier business different from what it advertised to customers.
Dot
January 31, 2023
Chiagoziem Bede Ikwueze

Chiagoziem has gathered a wealth of experience, having worked for many prominent crypto-based businesses, including Revain, Whiteboard Crypto, DeRev, The Crypto Cartel, Crypto News, MoneySwitch, Full Value Dan, and Bitcompare. Over the past couple of years, his works have been featured in many publications and places. When he is not writing, he spends time working on his other digital businesses, playing video games, reading books, watching movies, and most importantly, enjoying quality time with loved ones.

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Alex Mashinsky; Photo Source: CoinDesk

Bankrupt crypto lender, Celsius, is reported to have misled investors and often used new customer funds to pay for withdrawals. This report was given during the Tuesday filing by Shoba Pillay, the independent examiner employed by the New York bankruptcy court.

The report stated that Celsius’s operational structure could be likened to a Ponzi scheme.  The lender advertised a different thing to its customers while operating riskier businesses. It also failed to report millions of losses while its former CEO, Alex Mashinsky, cashed out $800 million.

Also, Celsius equated its value to the CEL token, stating it was the firm’s backbone. Celsius initially said it intended to raise funds for the business by selling 325 million CEL through private pre-sales and an initial coin offering (ICO) and that these sales would raise $50 million. It also promised customers they would be rewarded, but the firm did not deliver on this promise. 



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According to the report, 

“Celsius abandoned its promise of transparency from its start. Celsius’s first significant transaction after it was formed was to launch its ICO, a transaction that Celsius expected would raise $50 million. That did not happen. Instead, Celsius sold 203 million of the 325 million CEL offered for sale, raising $32 million. But Celsius never told its community that it failed to sell all of the CEL.”

Celsius used customers’ Bitcoin and Ethereum to purchase the CEL token, which left a massive hole in its balance sheet leading to billions of losses upon filing for bankruptcy. The firm also failed to deliver 80% reward rates to its customers because it had no profits to share. 

Independent Examiner’s Report Shows Celsius Was Running A Ponzi Scheme

HomeCrypto lending
Contents
Alex Mashinsky; Photo Source: CoinDesk

Bankrupt crypto lender, Celsius, is reported to have misled investors and often used new customer funds to pay for withdrawals. This report was given during the Tuesday filing by Shoba Pillay, the independent examiner employed by the New York bankruptcy court.

The report stated that Celsius’s operational structure could be likened to a Ponzi scheme.  The lender advertised a different thing to its customers while operating riskier businesses. It also failed to report millions of losses while its former CEO, Alex Mashinsky, cashed out $800 million.

Also, Celsius equated its value to the CEL token, stating it was the firm’s backbone. Celsius initially said it intended to raise funds for the business by selling 325 million CEL through private pre-sales and an initial coin offering (ICO) and that these sales would raise $50 million. It also promised customers they would be rewarded, but the firm did not deliver on this promise. 



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


According to the report, 

“Celsius abandoned its promise of transparency from its start. Celsius’s first significant transaction after it was formed was to launch its ICO, a transaction that Celsius expected would raise $50 million. That did not happen. Instead, Celsius sold 203 million of the 325 million CEL offered for sale, raising $32 million. But Celsius never told its community that it failed to sell all of the CEL.”

Celsius used customers’ Bitcoin and Ethereum to purchase the CEL token, which left a massive hole in its balance sheet leading to billions of losses upon filing for bankruptcy. The firm also failed to deliver 80% reward rates to its customers because it had no profits to share. 

Chiagoziem Bede Ikwueze

Chiagoziem has gathered a wealth of experience, having worked for many prominent crypto-based businesses, including Revain, Whiteboard Crypto, DeRev, The Crypto Cartel, Crypto News, MoneySwitch, Full Value Dan, and Bitcompare. Over the past couple of years, his works have been featured in many publications and places. When he is not writing, he spends time working on his other digital businesses, playing video games, reading books, watching movies, and most importantly, enjoying quality time with loved ones.

Bankrupt crypto lender, Celsius, is reported to have misled investors and often used new customer funds to pay for withdrawals. This report was given during the Tuesday filing by Shoba Pillay, the independent examiner employed by the New York bankruptcy court.

The report stated that Celsius’s operational structure could be likened to a Ponzi scheme.  The lender advertised a different thing to its customers while operating riskier businesses. It also failed to report millions of losses while its former CEO, Alex Mashinsky, cashed out $800 million.

Also, Celsius equated its value to the CEL token, stating it was the firm’s backbone. Celsius initially said it intended to raise funds for the business by selling 325 million CEL through private pre-sales and an initial coin offering (ICO) and that these sales would raise $50 million. It also promised customers they would be rewarded, but the firm did not deliver on this promise. 



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


According to the report, 

“Celsius abandoned its promise of transparency from its start. Celsius’s first significant transaction after it was formed was to launch its ICO, a transaction that Celsius expected would raise $50 million. That did not happen. Instead, Celsius sold 203 million of the 325 million CEL offered for sale, raising $32 million. But Celsius never told its community that it failed to sell all of the CEL.”

Celsius used customers’ Bitcoin and Ethereum to purchase the CEL token, which left a massive hole in its balance sheet leading to billions of losses upon filing for bankruptcy. The firm also failed to deliver 80% reward rates to its customers because it had no profits to share. 

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Chiagoziem Bede Ikwueze