Great Article on Cryptocurrency Finance: Celsius' Failure and Its Complicated Consequences The Demise of CEO Mashinsky and the Group
On Monday, a New York bankruptcy court issued a complex settlement in which former Celsius CEO Alex Mashinsky and three related entities gave up their rights to receive distributions of assets from Celsius’ debt, a massive credit line from the cryptocurrency community. The settlement prevents Mashinsky from receiving any payments or crypto from the crisis distribution, and also determines that he is not responsible for Celsius’s collapse. The locked-up assets will be redistributed to other creditors—giving some hope to those who lost money.
Impact of the Agreement on Creditors and Related Parties
Mashinsky’s family, meanwhile, has vehemently disputed the settlement, arguing that she has a priority claim to the assets. Indeed, while the settlement cuts off Mashinsky’s claims, it is believed that the government’s findings and related events will reduce the amount Celsius can repay to creditors by billions of dollars. These allegations have sparked a protracted legal battle as the parties battle to determine their true rights to the frozen assets.
Attorney Clayton's Complaint: Consumers Deserve Better
The main culprit, Mashinsky, exploited the trust of retail investors. He promised DeFi-style services, then used customer funds to make high-risk investments. As a result, he made tens of millions of dollars (~$48 million), while customers lost more than $4.7 billion (~$4.7 billion). Influencer Tiffany Fong was particularly hurt, losing 3.1 BTC and 11.6 ETH (equivalent to more than $300,000). Public opinion agrees that the United States deserves better regulators to protect the interests of retail investors in the cryptocurrency market.
Asset Distribution and Progress in the Distribution Process
According to the latest report, Celsius has distributed more than $2.5 billion to more than 251,000 creditors by August 2024. However, thousands of creditors are still demanding more than $1 billion, demonstrating the scale of the debt pile and the influence of Celsius. Experts also warn that the process of verifying and classifying compensation claims remains a huge challenge for legal agencies.
Mashinsky's Perceptions of Virtue and Regret
During the trial, Mashinsky admitted to providing “false comfort” to customers by claiming that Celsius had regulatory approval for its “Earn” program. In reality, he had deliberately concealed the sale of his CEL tokens. Clayton described Mashinsky as exaggerating the safety and profitability of Celsius, encouraging users to “get out of the bank” and move their crypto onto his platform.
Implications and Legal ActionsIn the History of Cryptocurrencies
Mashinsky’s manipulation of the CEL Token price was part of a multi-year campaign that involved hundreds of millions of dollars in trading, artificially pushing up the Token price. Investors even used their own customer deposits to invest in the market, disregarding regulations on transparency and financial security.
Source: https://tintucbitcoin.com/chu-celsius-cuu-ceo-tu-bo-quyen-loi/
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