אַרקאַנסאַס רעזידענט לאָנטשיז קלאַס-קאַמף פּראָצעס קעגן סעלסיוס

Arkansas resident Taylor Goines has filed a class-action lawsuit against Celsius for selling unregistered securities, likening the crypto lender’s operations to a Ponzi scheme.

The filing was initially made public by John Reed Stark. He runs John Reed Stark Consulting, which helps firms in the fintech space with SEC and FINRA compliance.

Goines is the plaintiff representing all members of the United States that purchased Celsius Earn Rewards, CEL tokens, and Celsius loans between Feb 2018 and the present.

He likened the crypto lender’s operation to a Ponzi scheme, where new investors have to come on board to pay yield to old investors continuously.

די פירמע פיילד פֿאַר קאַפּיטל 11 באַנקראָט in New York earlier this week after freezing customer funds in early June. The bankruptcy filing, the company said, would allow it some breathing room to stabilize its operations.

Had it not פאַרפרוירן ווידדראָאַלז last month, the company said it would have undergone a “bank run” scenario where early withdrawers would have had their transactions honored, while the outcome for smaller withdrawers would have been less certain.

Mashinsky and others under fire

סעלסיוס made money by lending to institutional borrowers at higher interest rates than it offered for deposits, touting high-yield investment products as low-risk but high-yield. It began dabbling in high-risk investments in 2020 after the appetite for institutional loans dipped, investing funds in decentralized finance (דעפי) products without considering the accompanying risks.

די איינגעבן alleges that Celsius and its executives continually made misleading statements regarding how certain products were managed and that the company failed to register their yield or interest-bearing products with the Securities and Exchange Commission.

The lawsuit defines securities according to Section 2(a)(1) of the Securities Act, 15 U.S.C. §77b(a)(1), and alleges that Celsius violated  Sections 5(a), 5(c), and 12(a) of the Securities Act, 15 U.S.C. §§77e(a), 77e(c), and 771(a). אָפּטיילונג קסנומקס(a) involves the interstate sale of unregistered securities, while Section 5(c) compels sellers to register a זיכערהייַט. אָפּטיילונג קסנומקס(a) provides a legal basis for buyers of unregistered securities to sue sellers.

Other allegations assert that Alexander Mashinsky and other Celsius executives enriched themselves from inflated CEL token prices at customers’ expense. The plaintiff demands restitution derived from the difference between the purchase and sale of Celsius products.

Consultant slams lack of Celsius SEC registration

Stark was critical of Celsius in a לינקעדין פּאָסטן following the release of the lawsuit documents. He pointed out that the only recourse facing victims of Celsius is the money from the outcomes of the bankruptcy, since Celsius was not registered with the SEC and provided no Federal Deposit Insurance to its customers in the event of default.

Last week, a former Celsius employee, Jason Stone, סוד the company for manipulating the cryptocurrency markets and unsound accounting practices.

The plaintiff demands a trial by jury, which Stark גלויבט Celsius will lose. Whether enough money remains to compensate victims after the litigation is unknown.

אָפּלייקענונג

אַלע די אינפֿאָרמאַציע קאַנטיינד אויף אונדזער וועבזייטל איז ארויס אין גוטן אמונה און בלויז פֿאַר אַלגעמיינע אינפֿאָרמאַציע צוועקן. קיין אַקציע וואָס די לייענער נעמט אויף די אינפֿאָרמאַציע געפֿונען אויף אונדזער וועבזייטל איז שטרענג אויף זייער אייגן ריזיקירן.