A new class action lawsuit has been filed in the United States District Court in New Jersey against the Celsius unit, its CEO Alexander Mashinsky, and its executive directors Shlomi Lyons, David Bess and Alan Jeffrey Carr. It was filed by leading US law firm Bragger Eagle & Square, PC on behalf of all investors who acquired CEL tokens between February 9, 2018 and July 13, 2022.
The class action alleges that Celsius, a financial services company, generates revenue through cryptocurrency trading, lending and lending; Selling its unregistered securities and engaging in proprietary trading.
The complaint refers to Celsius Core Assets (CELs) as “securities”. In the wake of the June Crisis and Celsius suspending accounts of its investors, it cited that “the price of the CEL token fell from a peak of $7.73 on June 3, 2021 to a low of $0.28 a year later.”
The complaint also alleges that the individual defendants as well as Celsius and its associates have violated the provisions of the Securities Act by selling unregistered securities.
Furthermore, the complaint states that “the defendants violated the provisions of the Exchange Act by carrying out a plan, scheme, and course of conduct intended to defraud retail investors and thereby artificially inflate them.” Prices caused to buy Celsius Financial Products.”
Celsius bankruptcy hearing
The first bankruptcy court for cryptocurrency lender Celsius took place on Monday last week, where its lawyers revealed that the crypto lender had half a million creditors owed more than $5 billion.
a moment ago, @ Celsius Network Filed a voluntary petition for Chapter 11 protection and announced that the company had begun a financial restructuring. https://t.co/vf5wsT6TMp
— Celsius (@CelsiusNetwork) 14 July 2022
Information about its liquidity crisis first emerged when Celsius announced on June 12 that it was halting all customer withdrawals due to “extreme market conditions”.
On July 14, Celsius formally filed a petition for Chapter 11 bankruptcy protection in the Southern District of New York (SDNY) Bankruptcy Court. For Celsius’ creditors, most of whom are regular retail investors, court documents paint a troubling picture.
As U.Today reports, Celsius CEO Alex Mashinsky admitted that there was a $1.2 billion hole in the company’s balance sheet, according to the company’s bankruptcy documents.