US Federal Trade Commission slaps Celsius Network with $4.7B fine

• The FTC said Celsius “squandered billions in user deposits” after “duping” customers into depositing funds.
• Celsius and its former CEO have also been sued by the US SEC today.
• Last week, the CFTC found the former CEO and Celsius Network guilty of violating several laws while operating in the country.

In what appears as a double tragedy for the bankrupt crypto lending platform Celsius Network, the US Federal Trade Commission (FTC) has issued the company with a $4.7 billion fine.

The judgment will, however, be suspended to “permit Celsius to return its remaining assets to consumers in bankruptcy proceedings.”

According to the July 13 FTC judgment, Celsius and its affiliate firms will be permanently barred from “offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets.”

FTC’s fine was announced just hours after the United States SEC filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky.

Why is Celsius under siege by US regulators?

The crypto lending company, which had its headquarters in New Jersey, offered customers a range of cryptocurrency services including interest-bearing accounts, personal loans backed by customers’ bitcoin deposits, and a cryptocurrency exchange before its collapse.

The FTC has stated that the platform co-founders Alex Mashinsky, Shlomi Leon, and Hanoch Goldstein misappropriated more than $4 billion in consumer assets while marketing the platform as a “safe place” for users to deposit their cryptocurrencies.

The FTC also charged Celsius with making $1.2 billion in unsecured loans, lying about having a user insurance policy worth $750 million, and without having any way to track its assets and liabilities until late 2021. According to the FTC, officials reportedly lied about the state of the company even as the 2022 cryptocurrency bear market was beginning.

The post US Federal Trade Commission slaps Celsius Network with $4.7B fine appeared first on CoinJournal.

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