Celsius is yet again being grilled by regulators wary of potential misconduct.
As Celsius’ bankruptcy case drags on, more and more evidence of financial misconduct – or at the very least, mismanagement – seems to be coming to light.that the company’s real financial situation is far direr than originally stated.In the most recent turn of events, regulators from Vermont haveon the case, claiming that, in reality, Celsius’ financial woes stretch as far back as 2019, despite the very strong bull market happening at the time.
According to the pursuant, Chris Ferraro – the CFO of Celsius – admitted to the court that financial troubles began with losses taken in 2020 and 2021, in direct contradiction to prior claims that the company’s bankruptcy is due to the market crash of 2022.More importantly, Ferraro also allegedly stated that Celsius was never profitable enough to pay out the promised yields, going by investments alone.
Although this business model has often been seen with Uber and other companies openly relying on venture capital to stay in business, in the case of financial firms promising huge yields, a certain phrase is often used – more specifically, a Ponzi scheme.According to the document presented earlier, Celsius repeatedly increased its net position of CEL by purchasing hundreds of millions of dollars worth of its own token.
Although – assuming goodwill on the part of Celsius – this may not have been anything but a regular investment, McLaughlin’s preliminary report indicates that if CEL tokens are excluded from the count, the company’s liabilities exceed all available assets.
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