Federal Trade Commission settles with Celsius for $4.7B fine; permanently bans company from all trading activities

2023-7-14 21:20

The Federal Trade Commission (FTC) permanently banned bankrupt lender Celsius (CEL) Network “from offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets,” according to a July 13 statement.

The regulator further stated that it agreed to a $4.7 billion fine with the bankrupt crypto company. However, the fine would be “suspended to permit Celsius to return its remaining assets to consumers in bankruptcy proceedings.”

FTC says Celsius deceived customers with false promises

According to a July 13 court filing, FTC said Celsius and its top executives, including its co-founder Alex Mashinksy, claimed the platform was safer than banks in several promotional materials and deceived users by falsely promising they could withdraw their crypto deposits anytime.

Additionally, the regulator highlighted other promises the exchange used to sway users to its platform, including claims that it did not make any unsecured loans and that it maintained a $750 million insurance policy for deposits

However, FTC said Celsius misappropriated around $4 billion in customer deposits and routinely made unsecured loans, totaling $1.2 billion as of April 2022. Besides that, the company did not hold a $750 million insurance policy for deposits and lacked a system to track its assets and liabilities until mid-2021.

In his statement, the director of FTC’s Bureau of Consumer Protection, Samuel Levine, described Celsius’s business model as an “old-fashioned swindle.”

Case against Celsius co-founders to proceed

FTC stated that the case against Celsius’s three co-founders, Alexander Mashinsky, Shlomi Daniel Leon, and Hanoch “Nuke” Goldstein, would proceed in a federal court as they have not agreed to a settlement.

The regulator noted that Celsius’s co-founders protected withdrew significant sums of cryptocurrency from Celsius two months before it became bankrupt while lying to their customers about the company’s financial health.

Earlier today, Mashinksy was arrested, and several federal agencies, including the U.S. Securities and Exchange Commission (SEC), brought charges against him.

The post Federal Trade Commission settles with Celsius for $4.7B fine; permanently bans company from all trading activities appeared first on CryptoSlate.

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LGBTQ+ creators file lawsuit against YouTube for discrimination

A group of LGBTQ+ YouTubers this week filed a federal lawsuit against Google, claiming the site has engaged in discriminatory practices that deliberately suppress their ability to make money. Part of the problem is that YouTube has kept its algorithms so mysterious, there’s no way to know if it’s deliberately discriminating against any particular group, or if it’s just an offshoot of its recurring problems with ad revenue According to the vid creators, both YouTube‘s algorithms and human reviewers single out content with words like “gay,” “lesbian,” etc, and put it behind an age-restriction gate.

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