Analysis
Fraud and market manipulation behind the cryptocurrency
In 2025, we find ourselves putting on a rear wind of cryptocurrency, with a bitcoin exceeding $ 100,000, the mica entering the EU and several new initiatives announced under the new American administration. I thought I would take this opportunity to reflect on one of the greatest crypto samples of 2022, the former “bank” of Crypto, Celsius Network, whose former CEO recently pleaded guilty to fraud and Handling the market of several billion dollars.
It was one of the greatest collapses of cryptography that we saw, with $ 4.7 billion in frozen cryptographic assets of investors after suddenly interrupted all withdrawals. While his slogan “Unbank Yourself” turned out to be ironic when he appeared that Celsius succumbed to a common bank following the collapse of Luna, parallel investigations of the Ministry of Justice (DoJ), Securities and Exchange Commission (SEC) and American and American goods The Term Trading Commission (CFTC) then revealed that there was much more below the surface.
The rise and the fall of Celsius
Before diving into fraud and manipulation of the market, let us quickly look at the rise and the fall of Celsius. According to their archived website, which serves as a window in the cryptographic landscape of the 2020s, it all started on a coffee towel in 2017. Ready obtained by them. The main attraction of the platform was the “win” program, which enabled Celsius to invest the assets of the customer and reached a point of supply of yields up to 18%. By 2021, Celsius was estimated at $ 25 billion in assets; However, the CFTC file would later cast doubt about this number.
All this collapsed dramatically in June 2022. The collapse of Terrausd-Luna from the previous month had frightened the market, leading to persistent rumors of liquidity problems and investment losses for Celsius. These rumors were refused until June 13, when Celsius suddenly interrupted all the withdrawals of customers. A month later, the company has filed a record, revealing a massive hole in its balance sheet and 600,000 unleashed depositors owed $ 4.7 billion. Most of the comments at the time fell it out to a classic bank; However, the DOJ, SEC and CFTC surveys the following year suggested that there were much more behind the scenes than people thought.
“There is no hope … there is no plan”
The DoJ affair, which had a guilt last month, revealed two cases of fraud in the previous calendar. First, most business and risks were distorted. Although we did not cover all the false statements, the summary is clear: you do not get a low risk yield of 18%. Shocking. The CFTC case gives a fairly complete overview of many false declarations. The deposit of the SEC also includes messages revealing employees ranging from “we have no profitable services” to “the current business model is not financially sustainable” in the incredibly austere “there is no hope … There is no plan ”.
Support a owner token
The second part of the case revolves around market manipulation, which is a little more complex. The manipulation concerns the Cel of cryptography token owner of Celsius, and what is interesting, this is how it was done. Part of the interest (or rewards) of investors was paid in CEL, which makes Celsius’ interest in maintaining the value of Cel at a high level. It was also exchanged on secondary markets, and the perception of the public of the success of the company was linked to the success of the CEL token. An employee wrote that “the more” the price of CEL is high, “the more people understand that Celsius is a legitimate company and will get customers”.
Celsius supported the price in several ways. First, he used business funds, including deposit funds to buy Cel. The deposit of the SEC shows that many more CELs has been bought than necessary to finance interest and reward payments.
Celsius staff also designed a program to use their own over -the -counter office to help finance and hide the activity. Transactions on the Celsius platform are only reflected in internal recordings and not on blockchain or other users on the platform. The deposit of the dry stipulates: “Celsius would sell that via the non -public OTC office, and use the product to turn around and buy that via public means and increase its price.”
This CEL would then be sold on the non -public OTC office. In certain circumstances, Celsius strategically timed the activity, where its public purchases would push confidence and the price enough for its over -the -counter non -public sale to achieve an important profit.
This affair is an excellent example of the many layers of fraud and mismanagement that can exist in a single company. In addition to this, the manipulation part shows the unique challenges and risks that occur when the platforms emit and execute their own tokens. These are challenges that we must ensure that we are taken up in the new crypto wave.
Regulatory updates on capital markets
January 21: the SECOND announced that President Trump has appointed Mark T. Uyeda as the acting president of the Sec, where he has been a commissioner since 2022 and previously held various positions since 2006. Uyeda has recently been confirmed for a five -year term until ‘In 2028 and expressed its commitment to the Mission of the SEC to protect investors, to maintain fair markets and to facilitate capital training.
January 21: the SECOND The acting president, Mark T. Uyeda, has created a new crypto working group to develop clear regulatory directives for cryptographic assets, moving away from the previous approach focused on the application of the SEC. The working group aims to create practical recording paths and sensitive disclosure frameworks while coordinating with other regulatory organizations and collecting contributions from various stakeholders.
January 20: members of CFTC Unanimously elected Commissioner Caroline D. Pham as an interim president. The acting president, PHAM, aims to refocus and change the management with a new leadership to fulfill the statutory mandate of the CFTC to promote responsible innovation and fair competition in our markets which have continued during the decades.
January 17: the Federal Reserve Council announced its withdrawal from the network of central banks and supervisors for Greening the financial system (NGFS).
January 17: the Authority for Financial Tops (AMF) announced its action and its supervision priorities for 2025, which align on its strategic plan “Impact 2027” and focus on 13 priority shares in six strategic areas, including market supervision, investor protection and sustainable finance .
January 16: the Bermuda monetary authority (BMA) published its business plan in 2025, describing commitments to improve regulatory executives and ensure operational efficiency, with key accents on green initiatives, digital innovation and customer protection.
January 15: the World Economic Forum (WEF) Published the 20th edition of its World Risk Report, revealing an increasingly fractured global landscape, where the climbing of geopolitical, environmental, societal and technological challenges threatens stability and progress.
Fines and application actions
The regulatory division of Montreal Stock Exchange Inc. (The “Stock Exchange”) inflicted a fine on a financial service company $ 113,000 plus $ 8,000 in costs to allow unauthorized access to nine employees between 2019-2023.
Hong Kong Independent commission against corruption (ICAC) charged a former associate director of the SFC with a conspiracy in order to pervert justice after the former associate director has advised suspects of market manipulation on how to manage surveys and destroy evidence.
The United Kingdom Financial conduct (FCA) was sentenced to Arian Financial LLP 288,962.53 £ for inadequate checks of financial crime. This case marks the seventh action to apply the law by the FCA concerning CUM-EX trading, the total fines now exceeding 22 million pounds sterling.
THE CFTC Orded Gemini Trust Company to pay a penalty of $ 5 million by the US District Court for having made false or deceptive declarations to the Commission concerning a Bitcoin term certification in 2017.
THE CFTC announced that Florida district court rendered final defect judgments against Mosaic Exchange Ltd. And its CEO for managing a program of fraudulent digital assets which has defrauded 18 people. The defendants were ordered to pay around $ 1.2 million in combined and restitution sanctions and were permanently prohibited from the CFTC regulated markets.
THE SECOND obtained final judgments against a former statistician Pfizer and his trading partner. People were found guilty of initiate negotiations after having made profits of $ 214,395 and $ 60,300 respectively by negotiating before the announcement of Paxlovid de Pfizer in 2021.
THE SECOND Billed nine advisers in investment and three brokers for having failed to maintain and preserve electronic communications, companies admitting violations and agreeing to pay combined penalties of $ 63.1 million.
THE SECOND Responsible for the SPEEDRATE LLC broker for having failed to submit suspicious activity reports (SRAS) between 2020-2023, due to inadequate surveillance and a survey on the suspicious negotiation activity of its customers. Without admitting or denying the conclusions, SpeedRoute agreed to pay a penalty of $ 600,000 and to be censored by the SEC for violation of the requirements of the exchange law.
THE SECOND announced that Robinhood Securities LLC and Robinhood Financial LLC agreed to pay $ 45 million in combined civil penalties to settle several regulatory violations, including failures in the suspicious declaration of activities, the protection of identity theft, cybersecurity and the requirements for holding files.
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