Celsius liquidates nearly $25 million in crypto after SEC charges lender and former CEO for fraud
|- Celsius started liquidating holdings of LINK, BNB, 1INCH, BONE, ZRX among other cryptos after SEC brought charges against the lender.
- The $25 million worth of crypto liquidation is likely related to a US judge's authorization from bankruptcy court.
- The bankrupt crypto lender held approximately $164.5 million worth of altcoins on the Ethereum Virtual Machine chain.
Bankrupt crypto lender Celsius Network started liquidating some of its assets on Monday after receiving authorization from the bankruptcy court as the US Securities and Exchange Commission (SEC) has charged the entity and its former CEO Alex Mashinsky for violation of federal securities laws.
The firm has been accused by a former money manager of running a Ponzi scheme.
Also read: Former Celsius CEO Alex Mashinsky arrested by DoJ and sued by SEC, CFTC and FTC
Celsius begins crypto liquidations while battling SEC allegations
The US SEC charged bankrupt crypto lender Celsius Network and founder Alex Mashinsky with the violation of the registration and anti-fraud provisions of the federal securities laws.
The crypto lender is battling accusations of running a ponzi scheme, gross mismanagement of customer deposits and manipulation of crypto markets, among other charges.
While tackling the legal challenges facing the firm, Celsius received authorization from bankruptcy court to start liquidating its crypto holdings starting July 1. The entity is likely to utilize these funds towards paying back creditors.
Crypto intelligence tracker Lookonchain noted that Celsius has started liquidating its holdings, starting with $25 million worth of assets on Monday. On-chain analytics show that Celsius sold 1.27 million LINK worth $8.5 million, 2.83 million SNX worth $7.84 million, 12,597 BNB worth $3 million, 4.45 million 1INCH tokens worth $2.26 million, and 8.53 million ZRX tokens worth $1.9 million. Moreover, FTX and BONE tokens worth $948,000 were transferred to exchanges for liquidation.
SEC charges are geared towards Celsius Earn Interest program
According to the US financial regulator’s complaint, from 2018 to June 12 2022, Celsius offered to investors a crypto lending product, the Earn Interest Program. This program allowed users to tender their crypto assets in exchange for interest payments.
The regulator argues that the program constitutes the offer and sale of unregistered securities. Celsius is tackling the SEC’s charges against its firm and working on bankruptcy proceedings to return creditor funds.
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