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Celsius Network Faces $4.7B Fine for Misappropriation of User Deposits, Deceptive Practices

The U.S. Federal Trade Commission (FTC) has imposed a staggering $4.7 billion fine on Celsius Network, a bankrupt crypto lending platform. The FTC accused Celsius and its affiliate companies of misleading customers and misusing their funds, resulting in the loss of billions in user deposits. As a consequence, Celsius and its affiliates are permanently prohibited from offering any services related to depositing, exchanging, investing, or withdrawing assets.

Based in New Jersey, Celsius Network marketed various cryptocurrency products and services to consumers, including interest-bearing accounts, personal loans backed by cryptocurrency deposits, and a cryptocurrency exchange. The FTC’s complaint alleged that co-founders Alex Mashinsky, Shlomi Leon, and Hanoch Goldstein portrayed the platform as a “safe place” for users to deposit their cryptocurrency while secretly misappropriating over $4 billion in customer assets.

Furthermore, the FTC revealed that Celsius had made $1.2 billion in unsecured loans, falsely claiming to possess a $750 million user insurance policy. The company also lacked proper asset and liability tracking systems until late-2021. Even during the cryptocurrency market downturn in 2022, company executives allegedly deceived customers about the financial state of the business. Shockingly, Leon, Goldstein, and Mashinsky withdrew significant amounts of cryptocurrency from Celsius just two months before filing for bankruptcy, leaving consumers without access to their life savings, college funds, and retirement savings.

As this is an ongoing story, additional details will be provided as they emerge. To commemorate this moment in history and support independent journalism in the crypto space, readers are encouraged to acquire this article as an NFT (non-fungible token).

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