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id: 257

Celsius $CEL Fraud Case

D. New Jersey
Since February 9, 2018, Celsius, through its affiliates Celsius Lending LLC and Celsius KeyFi LLC, has been:
  • funding its lending operations and proprietary trading through the sale of unregistered securities in the form of Earn Rewards Accounts and CEL tokens.
  • promising a better-than-market interest rate that is paid in cryptocurrency in exchange for investing in the Earn Rewards Accounts.
  • held the equivalent of over $25 billion on the peak from the sale of unregistered securities.
In June 2022 Celsius announced that due to extreme market conditions, it was pausing withdrawals, swaps and transfers between accounts. Celsius did not have enough assets to meet its withdrawal obligations and could only maintain its yield rate promises by continually bringing in new investors whose new influx of money would be used to pay off the yield for old investors.
On June 16, 2022, CNBC in its article reported that "State securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington are investigating crypto lender Celsius Network’s decision this week to suspend customer redemptions.
Earlier the same month, Business Insider wrote in its article that Jason Stone, the CEO of a firm Celsius acquired is suing the crypto lending platform, alleging it committed fraud and calling it a Ponzi scheme. Stone has alleged, among other things, that Celsius CEO Alex Mashinsky was “able to enrich himself considerably.”
Taking all facts, representations, and authorities' responses into account there are grounds for suspecting the leaders and stakeholders of the Company business misconduct, in particular:
  • Sale of unregistered securities in violation of federal and state securities laws.
  • A series of misleading statements induced unsuspecting investors to purchase Celsius Financial Products at inflated rates.
  • Conducting a "Ponzi scheme" to meet promises to current investors.
  • Breach of Fiduciary duties by the employment of unscrupulous business schemes and proprietary trading operations.
  • Financial misrepresentations.

Case Status
Attorney Investigation
Alleged Offence
Misleading Statements
Financial Misrepresentation
Failure to Disclose
Price manipulation
Breach of Fiduciary duty
Suspected Party
Service Provider
Security Type
Crypto Asset
Trade Direction
Shock Event Date
09 September 2022
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