Celsius Breakdown Reaches 80%, Amidst US DOJ's Pursuit for a 20-Year Imprisonment of Celsius' Founder, Mashinsky
Revamped Recap
- The native CEL token of the now-defunct Celsius Network saw a meteoric rise in value following the DOJ's call for a severe sentence against ex-CEO Alex Mashinsky, who's accused of years-long deception and financial misconduct.
- The former CEO, who's due in court on May 8, faces a potential 20-year prison term for fraudulent practices like misappropriation of customer deposits and manipulation of the CEL token.
- CEL, which plunged below $0.06 earlier in April, experienced an 80% price rally in the past day, climbing to a 12-week high of almost $0.18, and currently trades at around $0.14.
- Regardless of this recent surge, it remains a distant cry from its all-time high of over $8 observed in June 2021, with a minuscule market cap of $5.1 million compared to its earlier $3.5 billion.
- Investors initially entrusted their savings to Celsius based on Mashinsky's lies, leading to the collapse of the platform and the eradication of their savings.
A Glimpse into Celsius' Tumultuous Journey
Once a popular crypto lending platform, Celsius Network faced a crisis in 2022 when customer withdrawals, swaps, and transfers were halted due to "extreme market conditions," reveling severe liquidity issues. Within no time, the entity filed for Chapter 11 bankruptcy, disclosing a $1.2 billion balance sheet hole and debts of $4.7 billion to users.
The subsequent investigations indicated that Mashinsky allegedly misused customer funds and manipulated the price of CEL. He was arrested in 2023 on multiple fraud charges and later released on a $40 million bond secured by his Manhattan residence.
In November 2023, the New York Southern Bankruptcy Court approved a reorganization plan, allowing Celsius to exit bankruptcy. A significant part of the program involved the creation of a Bitcoin mining entity, Ionic Digital, owned by Celsius' creditors.
By the beginning of last year, the company started distributing over $3 billion in cryptocurrency and fiat to affected users as part of its restructuring plan. As of August 2024, around 93% of the approved amount had been distributed to over 250,000 creditors across 165 countries.
Recently, the company announced plans to distribute an additional $127 million to creditors.
Note: The information provided is based on available data and may not reflect the current status or price of the CEL token. Always conduct thorough research before making investment decisions.
Sources
[1] Bloomberg - Link[2] Reuters - Link[5] CoinDesk - Link
- The Bitcoin mining entity, Ionic Digital, was created as a significant part of the reorganization plan for the former crypto lending platform, Celsius Network, and is now owned by Celsius' creditors.
- Amidst the recent surge in the price of the CEL token, it's important to note that the CEL token still remains a distant cry from its all-time high, with a minuscule market cap compared to its earlier peak.
- Despite Mashinsky's estimated potential 20-year prison term for fraudulent practices, the coingecko platform showed that the CEL token experienced an 80% price rally in the past day, climbing to a 12-week high.
- Investors interested in crypto finance should exercise caution as the upsurge in the CEL token price doesn't necessarily shield it from the consequences of Mashinsky's financial misconduct and reorganization of the Celsius platform.
- The estimated distribution of an additional $127 million to creditors of the Celsius Network by the company is a testament to the ongoing reorganization efforts, demonstrating the company's commitment to recovering and redistributing funds to affected investors.
