Celsius Accused of Being a Ponzi Scheme Yet Again
Is Celsius a Ponzi scheme? Well, we are about to find out.
Celsius is in serious trouble again. The company, which filed for bankruptcy back in July, is now being called a Ponzi scheme.
A corresponding probe was launched by the judge in charge of the Celsius bankruptcy case on Nov.1. An independent examiner, appointed on Sep. 9, and the official committee of Celsius creditors are in charge of it.
The decision comes after some customers alleged that Celsius had used the assets of new users to pay yields and facilitate withdrawals to existing users. This kind of conduct could fall under the definition of a Ponzi scheme if proved.
What's noteworthy is that Celsius has been accused of being a Ponzi scheme in the past. The decentralized finance protocol KeyFi put forward similar allegations, filing a lawsuit against Celsius in July.
Celsius filed for Chapter 11 bankruptcy on July 13th, blaming the crypto market crash for the decision.
GNCrypto extensively covered Celsius’s story. Back in September, we reported that the court allowed it to mine and sell Bitcoin to pay its debts. The network owes $5 billion to its creditors.
We also reported that the crypto community was taken aback by the fact that the company continued to pay weekly rewards despite putting withdrawals to a halt.
Celsius has received a lot of bad publicity lately. It is unclear whether this platform will continue operating in the future in any form.
