According to a recent filing by the Vermont Department of Financial Regulation on Wednesday, cryptocurrency lender Celsius Network deceived investors about the state of its finances by utilizing its CEL token to strengthen its balance sheet and occasionally using new investor funds to pay back previous investors. The agency, one of several state authorities looking into the bankrupt crypto lending company throughout its continuing bankruptcy proceedings, submitted documents in favor of the motion U.S. Trustee office to hire an independent examiner, contending that Celsius has not been open about its finances. The Vermont investigation is possibly the most severe criticism of the company’s management so far, notably because the collapse of the lender last summer contributed to the downfall of the whole global cryptocurrency market. In a recent creditor call, Celsius revealed it could not generate enough income to maintain its returns, according to the regulator, who all but accused the lender of operating at times with a Ponzi scheme-like structure. 40 Regulators Looking Into Celsius According to the document, some 40 state officials are now investigating Celsius’ activities and finances. The filing stated, “During the course of the multistate investigation, it has become clear that Celsius, through its CEO Alex Mashinsky and otherwise, made false and misleading claims to investors about the company’s financial health and its c...
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