- Celsius Creditors allege that Wintermute assisted in wash trading.
- They claim Celsius and Wintermute artificially inflated CEL trading volume for personal gain.
- Celsius will be dumping a long list of altcoins starting next month.
Celsius Network, the bankrupt crypto lending platform, is facing new allegations from its creditors regarding market manipulation and inflated CEL token volume.
In a recent court filing in the United States District Court for the District of New Jersey, the creditors claimed that Celsius executives collaborated with crypto market maker Wintermute to manipulate the price of Celsius CEL tokens through wash trading.
Notably, Wash trading is a deceitful practice that creates a false impression of high trading volume for a particular asset.
The lawsuit alleges that Wintermute assisted Celsius CEO Alex Mashinsky and other executives in engaging in illegal wash trading of CEL tokens for personal gain. The creditors argued that both the Celsius executives and Wintermute were aware of the manipulative acts and knowingly participated in the scheme.
Evidence supporting the allegations came from publicly available internal conversations among Celsius executives. The discussions revealed the improper market-making activities involving Wintermute, allegedly occurring from March 2021 until Celsius froze withdrawals in June 2022.
According to the court filing, Celsius had failed to implement effective measures to prevent such illicit activities. The existing controls were virtually non-existent and incapable of detecting or preventing wash trading and self-dealing.
These developments followed the recent acquisition of Celsius’s assets through an auction. Coin Edition reported that a crypto consortium named Fahrenheit successfully bid on Celsius’s purchases, previously valued at $2 billion.
The acquired assets included Celsius Network’s institutional loan portfolio, staked cryptocurrencies, mining units, and other alternative investments.
Nonetheless, as Coin Edition reported last week, Celsius will be massively dumping a long list of altcoins under its reorganization bid in a related development.
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