A court-appointed examiner investigating the collapse of cryptocurrency biz Celsius has issued a report of her findings, which are wrapped up in the very first sentence of its executive summary.
“The business model Celsius advertised and sold to its customers was not the business that Celsius actually operated,” attorney and independent examiner Shobal Pillay said of her findings.
Later she notes in the 476-page damning report [PDF] “Behind the scenes, Celsius conducted its business in a starkly different manner than how it marketed itself to its customers in every key respect. Celsius abandoned its promise of transparency from its start.”
From its inception as a public company, Celsius lied by concealing from investors it failed to meet its $50 million earnings target from its initial coin offering, or ICO, of its company CEL tokens, she alleges.
“Despite its promises of transparency, Celsius debated internally whether to tell its community how the ICO actually turned out but decided not to do so because it feared its community would be upset,” Pillay said in the report, which noted that former CEO Alex Mashinsky promised to buy the unsold tokens from the ICO, but never did so.
Within a couple of years of the company’s 2018 initial CEL coin offering, Celsius had substantially expanded its purchase of its own currency, and was doing so in a way that propped up the price to hide the fact that most of the market was coming from Celsius’ own purchase of its coins.
Celsius, which was founded to act as a loan platform where cryptocurrency…
