CRYPTO COMPANY ALLEGEDLY ENGAGED IN “UNFAIR AND DECEPTIVE PRACTICES”
According to a complaint filed by the Federal Trade Commission, New Jersey-based Celsius Network – which marketed a range of cryptocurrency products and services -- claimed to be “safer than a bank,” and that its investments had “less risk,” or “no risk.” Investors were apparently told that they could “earn” up to “18.64 APY,” that they could withdraw their investments “at any time,” and that the company maintained “billions of dollars in liquidity.”
But the FTC has alleged that many of those representations were false, and the company (and its officers), purportedly purloined the cash “to pay corporate bills, to fund interest payments to other consumers, and to make high-risk investments.” The company also reportedly had a small capital reserve, and nowhere near the liquidity cushion claimed.
To compound matters, months before the company filed for bankruptcy, its officers are said to have siphoned off, and pocketed, vast sums of cryptocurrency for their own benefit, such that the FTC is currently seeking injunctive relief and monetary damages against those officers to help compensate defrauded investors.
In a proposed settlement reached with the corporation (and affiliated entities), there will be a “permanent ban on marketing, promoting, offering, or distributing any product or service that could be used to deposit, exchange, invest, or withdraw assets.” And there will be a prohibition to making any “misrepresentations about the benefits of any product or service.” (Additionally, the order imposes a $4.7 billion suspended judgment based on the companies’ financial condition.)
We guess you can take that to the bank?
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FTC PRESS RELEASE ~ (07.13.23)
CELSIUS COMPLAINT (FILED BY FTC)
CELSIUS PROPOSED SETTLEMENT (REACHED WITH CORP. ENTITIES)