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Celsius Faces “Ponzi Scheme” Investigation, WSJ

2 Nov, 20222 min readOther
Celsius Faces “Ponzi Scheme” Investigation, WSJ

According to a Wall Street Journal (WSJ) report, the court appointed an examiner to dive into Celsius Network LLC’s business operating model. The latest inquiry comes as a bankruptcy judge is looking to find out if the bankrupt firm functioned as a “Ponzi Scheme.”

Celsius Network, however, hasn’t responded to the latest court-appointed investigation, WSJ added.

A creditors' committee’s lawyer, Greg Pesce, added that although there are some reasons behind the investigation, they are still not sure “if Celsius Network was a Ponzi Scheme.” He said:

Let me make it clear we’re looking into whether it is. We don’t have an answer to that.

The bankrupt firm’s lawyers, on the other hand, restated that the examiner Shoba Pillay’s investigation could be “costly and time-consuming,” per the report.

The judge, however, added that Celsius Network might face prolonged and costly investigations if Pillay “isn’t allowed to broaden her probe.”

Did Celsius executives steal money?

As U.Today reported, Celsius Network founder Alex Mashinsky had $44 million locked in the platform after he withdrew $10 million for paying taxes. The withdrawal came before the bankrupt firm froze its customers’ accounts in July.

On the other hand, another report shows that the company’s CTO Nuke Goldstein and co-founder Daniel Leon withdrew a whopping $30 million from the platform, according to a U.Today report.

The bankrupt crypto lender is under federal investigation in roughly 40 states in the U.S., per a report on Oct. 19.

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