Celsius Network fined $4.7B by FTC - Best Crypto App.
Breaking: Celsius Network fined $4.7B by FTC

Celsius Network Fined by FTC

The United States Federal Trade Commission (FTC) has issued a $4.7-billion fine against the now-bankrupt crypto lender Celsius Network. However, the judgement will be suspended to “allow Celsius to return its remaining assets to consumers in bankruptcy proceedings.”

In addition, the FTC has prohibited Celsius and its affiliate companies from “offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets,” as stated in the July 13 announcement.

The New Jersey-based firm had offered a variety of crypto products and services to consumers, such as interest-bearing accounts, personal loans secured by their cryptocurrency deposits and a crypto exchange. The FTC alleged that co-founders Alex Mashinsky, Shlomi Leon and Hanoch Goldstein had marketed the platform as a “safe place” for consumers to deposit their cryptocurrency while misappropriating over $4 billion in consumers’ assets. The co-founders have not agreed to a FTC settlement and the case against them will proceed to federal court.

The FTC also claimed that Celsius had made $1.2 billion in unsecured loans, falsely stated that it had a $750-million user insurance policy and lacked any means of tracking its assets and liabilities until late-2021. Even during the onset of the 2022 crypto bear market, executives allegedly lied about the well-being of the company, as told by the FTC.

On the same day, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission also initiated legal action against Celsius. Simultaneously, Mashinsky was charged with seven fraud-related violations by the U.S. Department of Justice and was consequently arrested. Celsius had previously declared bankruptcy last July.

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