Celsius Network, an insolvent cryptocurrency lender, is now being investigated by federal authorities in the United States for suspected operational issues.
Celsius Network Reportedly Faces US Federal Investigation: Bankrupt crypto lender, Celsius Network is now facing a federal investigation in the United States due to… https://t.co/pGFcqCVvLC | https://t.co/bv9adjCGEk | https://t.co/FHLhKCQA7o #Cryptocurrency #Bitcoin #Ethereum pic.twitter.com/yqXx6QoRQy
— CryptoGator.co | Crypto and Forex News Aggregator (@eBargainsToday) October 19, 2022
According to the creditors’ counsel, there have been significant investigations conducted by government agencies into the debtors: In addition to the investigations or inquiries involving the federal government, Celsius is apparently subject to enforcement proceedings or investigations in at least 40 states.
According to the Texas State Securities Board, several state agencies are investigating cryptocurrency corporations.
The rise of Celsius
With its interest-bearing bitcoin deposits, Celsius became more popular. However, once hailed as a promising network, this network fell victim to cryptocurrency price declines early in 2018. Due to market volatility, the business initially froze customer withdrawals in June; a month later, it declared bankruptcy.
The special committee of the Board of Directors then justified the withdrawal suspension process by stating that, without a pause, some customers would have been paid in full without pause. In contrast, others would have been left waiting for Celsius to recover from illiquid or long-term asset deployment activities.
Ooh that hurts!⬇️
Celsius Faces Federal Investigations In 40 States For Suspending Crypto Withdrawals
— CryptoCMO (@CryptoCM0) October 19, 2022
As a result, the consumers who made deposits are now considered unsecured creditors on the platform.
A previous inquiry was made by the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Trade Commission about the company. Moreover, a federal grand jury in a New York district court summoned Celsius.
Ok so… #Celsius is now being investigated by an SDNY Grand Jury, SEC, FTC, CFTC, an independent examiner and over 40 state regulators. But, I am sure that everything was done kosher and by the book. Therefore, #Celsius C-Suite should have nothing to worry about right… 😬😬😬
— Plan©️ (@TheRealPlanC) October 19, 2022
Cryptocurrency lending initiatives were initially unknown to US federal authorities. Although the SEC allegedly investigated Celsius Network, Voyager Digital, and Gemini Trust earlier this year, no formal charges were filed.