The now-bankrupt cryptocurrency lender, Celsius Network, has announced its satisfaction with the resolutions reached with several U.S. government agencies.
This follows the Federal Trade Commission (FTC)’s enforcement of a $4.7 billion fine, which has been suspended to allow the company to return its remaining funds to users amidst its ongoing bankruptcy proceedings.
Celsius has confirmed that these developments will not affect its Chapter 11 bankruptcy plan or its capability to refund customers. The company has further pledged to cooperate with regulators and government agencies during this period.
However, this announcement was met with harsh criticism from members of the crypto community.
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Many expressed outrage on Twitter, accusing the company of mishandling customers and using corporate and legal jargon in its communication.
They also suggested that the company should use its remaining funds to compensate users instead of dealing with more legal expenses.
Simultaneously, former Celsius CEO Alex Mashinsky has been indicted with multiple criminal charges, including securities fraud, commodities fraud, wire fraud, and manipulation of the CEL token.
This development came after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Celsius and Mashinsky for allegedly making false promises about safe investments via the company’s “Earn Interest Program”.
The U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation further announced fraud charges against Mashinsky, who was subsequently arrested. In response, Mashinsky pleaded not guilty to the charges of misleading customers and inflating the CEL token.
U.S. Magistrate Judge Ona Wang approved Mashinsky’s release on a $40 million bond, under conditions that restrict his travel and prohibit him from opening new bank or cryptocurrency accounts.
As the company struggles with its legal woes and bankruptcy, Celsius is committed to regulatory compliance and user reimbursement.
Despite the severe backlash, it is yet to be seen how these developments will affect the broader cryptocurrency market.
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