Celsius Network might have hidden its dire financial status from investors, the Vermont Department of Financial Regulation said in a court filing on Wednesday.
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The regulator said that the troubled cryptocurrency lender engaged in the “improper manipulation of the price” of its CEL token to improve the company’s balance sheet, Bloomberg reports. The statements were made as part of the United States Trustee’s motion to appoint an independent examiner. The filing says:
“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, inter alia, the company’s financial health and its compliance with securities law.”
Moreover, Celsius had “massive losses” in the first half of 2021 and faced “two material adverse events” last summer. Despite that, the company decided to remain silent on its losses from investors.
Celsius filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in July this year. The company hopes that the restructuring plan will help it “maximize value for all stakeholders.” According to court filings, Celsius owes over $4.7 billion to more than 100,000 creditors and users.
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