Celsius Investors Take Legal Action Against Crypto Firm Wintermute for Aiding in Wash Trading
Celsius Network was a crypto lending enterprise that filed for bankruptcy in 2022. The firm has now amended its lawsuit by naming Wintermute as a participant in its internal operations. Wintermute is an algorithmic trading platform for digital currencies that operates on a global scale.
Celsius network is facing a class action lawsuit where the complainants have alleged that Wintermute assisted the cryptocurrency lending platform in performing wash trading.
After the document amendment made by Celsius network, Wintermute now appears as the newly added defendant in the ongoing case. The report has been covered in detail by Bloomberg.
The new turn of the case is going to settle in the court whether Celsius network participated in illegal market-making practices in tandem with Wintermute from 2021 to 2022. During this period, the Celsius network has already enforced a halt on withdrawals.
Celsius Network CEO and Other Top Executives are Facing New Charges
The recent changes made in the case by a court have also extended new charges against Celsius’s top executives. These new charges have alleged that CEO Alex Mashinsky and other top workers at the crypto lending enterprise were trying to manipulate the price of CEL coin using the wash trading method.
It is worth noting that wash trading is an illegal trading practice where a single investor or a group trades the same asset repeatedly to generate false market activity and traction.
The case alleges that the native token price namely CEL was subjected to market manipulation by the top execs at the firm using algorithmic support from Wintermute. It is worth noting that the creditors of Celsius network have already filed a series of lawsuits against the bankrupt firm.
However, with the latest changes wash trading has been added to the litany of lawsuits against it. Another important face covered by Bloomberg regarding this case is that the Celsius network transferred around $160 million worth of wrapped Bitcoin to third-party wallets and $20 million worth of WETH tokens to Wintermute-based wallets.
The Celsius network is effectively defunct now. However, Fahrenheit has reportedly completed the contract to acquire the firm and own its assets. The assets before the appearance of the lawsuit were valued at around $2 billion.
The acquisition contract transferred the ownership of mining units, institutional debt, alternative investments, and staked cryptocurrencies from Celsius to Fahrenheit.
By the decree of this acquisition contract, Fahrenheit is set to receive assets from the former cryptocurrency lender in the form of liquid cryptocurrencies. The total amount of assets that the crypto consortium is set to get from the Celsius network is estimated to be around $450 and $500 million.
