A lawsuit Filed Against Celsius Network Ensnares Crypto Firm Wintermute

The creditors of bankrupt landing firm Celsius have amended their lawsuit to include Wintermute, raising the stakes in the legal battle.

Plaintiffs in the class-action lawsuit against Celsius Network have raised new allegations, claiming that Wintermute played a role in facilitating wash trading for the crypto lending firm. These claims shed light on the intricate web of accusations surrounding the case.

According to Bloomberg, Wintermute Trading Ltd has been revealed as a fresh defendant in the ongoing class-action lawsuit, as indicated by the recent court filing.

Celsius executives are under scrutiny for their alleged involvement in “improper market making” alongside Wintermute, spanning from March 2021 to June 2022, which coincided with the freezing of withdrawals by the crypto lending firm.

Executives at Celsius Allegedly Manipulated CEL Prices

The lawsuit’s recent amendment claims that Celsius CEO Alex Mashinsky and other executives engaged in manipulative tactics involving wash trading, collaborating with algorithmic trading firm Wintermute, to influence CEL prices. These allegations shed light on potential company leadership and trading practices misconduct.

The latest court filing against Celsius reveals the addition of “wash trading” to the growing list of charges against the bankrupt company.

Wash trading deceives the market by artificially creating trading activity by simultaneously buying and selling the same asset.

The new allegations have sparked a wave of concern among those who endured financial losses while investing in Celsius Financial Products through their Earn Rewards Account, amplifying the significance of the ongoing class-action lawsuit against the company.

The ongoing lawsuit in the United States District Court for the District of New Jersey has revealed alleged wash trading accusations discovered from “publicly available internal conversations” among Celsius executives, as stated in the filed documents.

Before declaring bankruptcy, Celsius allegedly moved approximately $160 million worth of wrapped Bitcoin to external wallets, with several of those addresses supposedly under the control of Wintermute.

Blockchain intelligence firm Arkham reported that Celsius transferred $20 million worth of WETH to a Wintermute wallet in May.

Celsius’ Assets are Bought by Fahrenheit

In a landmark deal, the crypto consortium Fahrenheit emerged victorious in acquiring Celsius Network’s coveted assets, once valued at an impressive $2 billion.

This acquisition includes Celsius’ staked cryptocurrencies, mining units, institutional loan portfolio, and a diverse range of alternative investments, signaling a significant shift in the crypto landscape.

With this strategic move, Fahrenheit solidifies its position as a significant player in the industry, poised for future growth and innovation.

By the terms of the agreement, the crypto consortium is set to acquire a substantial sum of liquid cryptocurrency, expected to range from $450 million to $500 million, solidifying its position in the digital asset landscape.

The consortium is also expected to gain from acquiring a wide range of financial instruments, such as futures, options, and other derivatives tied to the underlying cryptocurrency, allowing it to benefit from the more volatile nature of the asset.