Court Examiner Deems Celsius a Ponzi Scheme

NEW YORK CITY, NY – A court-appointed examiner has determined in a report that Celsius Network used customer funds to inflate its CEL token’s value, further cementing the Celsius scandal.

The examiner, Shoba Pillay, submitted the findings to the U.S. Bankruptcy Court, Southern District of New York, concluding that Celsius’ “business operations amounted to a Ponzi scheme.” 

The examination also found that the company’s founder, Alex Mashinsky, profited $68.7 million while his co-founder, Daniel Leon, netted $9.7 million. 

Pillay reported that Celsius used a “flywheel” business model which spent $558 million buying its own token on the secondary market, then distributed the tokens as rewards to customers. Celsius was a crypto lending platform that allowed holders to stake tokens and earn interest.

Celsius went bankrupt in July 2022 during the height of the crypto winter when the market suffered a liquidity crisis.