Celsius ‘pleased’ with resolutions amid $4.7B FTC fine

This article has been updated to include Alex Mashinsky’s not guilty plea and charging details.

Bankrupt crypto lender Celsius Network has posted that the company is pleased with the resolutions that it reached with various United States government agencies. The announcement came after the news that the Federal Trade Commission (FTC) has imposed a $4.7 billion fine on the company.

On July 13, the FTC reached a settlement with Celsius, which comes with a $4.7 billion fine — suspended to allow the company to return its remaining funds to users as it goes through bankruptcy proceedings.

In its statement, Celsius said that these resolutions would not impact the firm’s Chapter 11 bankruptcy plan or its ability to return funds to its customers.

We are pleased to have reached resolutions with the Department of Justice, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Trade Commission as we continue to pursue a successful Chapter 11 Plan.

— Celsius (@CelsiusNetwork) July 13, 2023

Moreover, Celsius stated that it is committed to cooperating with regulators and government agencies.

While Celsius was pleased with the results, members of the crypto community were not. Many were incensed by Celsius’ remarks and blasted the company on Twitter.

In a tweet, Joey Hendrickson described Celsius Network’s announcement as “weird.” According to the community member, if the company “had any level of human conscience,” it would not be pleased. Hendrickson said that he would rather hear an apology for how the company “mistreated” customers.

Twitter user Amit Palaliya agreed with Hendrickson’s sentiments. The community member expressed dissatisfaction over using corporate and legal jargon as the company addressed its users. Palaliya urged the firm to distribute the funds that are left and tell the users to move on instead of continuing to throw money into “legal pits.”

Meanwhile, another community member blasted the company as they tweeted that they were also “pleased” that the former Celsius CEO Alex Mashinsky was charged with multiple crimes. They tweeted:

And We the Users, who spent their hard earned money on your extreme risk taking lies, are pleased to see Alex Mashinsky charged with multiple crimes https://t.co/QCnjAGPFzK

— Digital Asset Updates (@DigitalAssetUpd) July 13, 2023

On July 13, the U.S. Securities and Exchange Commission filed a lawsuit against the crypto lender and Mashinsky. The SEC argued that the former Celsius CEO falsely promised a safe investment to users with the company’s “Earn Interest Program.“

Apart from this, the U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation also announced fraud charges against Mashinsky. Mashinsky was reportedly arrested on the same day as part of the indictment process.

While Celsius is cooperating with regulators, Mashinsky subsequently pleaded not guilty to charges of misleading customers and inflating the CEL token.According to court data, U.S. Magistrate Judge Ona Wang approved Mashinsky’s release on a $40 million bond.

Under the bond conditions, Mashinsky is restricted from traveling and is not allowed to open new bank or crypto accounts. Mashinsky was charged with seven criminal counts, including securities fraud, commodities fraud and wire fraud, CEL token manipulation, according to an indictment released on July 13.

Additional reporting by Helen Partz.

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