Shoba Pillay, an independent examiner for the New York Bankruptcy court, released a 476-page long report on the inner workings of Celsius. His « investigate mandate » included looking into the claims that Celsius was a Ponzi scheme. And although he doesn’t use the word in the rest of his report, his findings paint a clear picture of mismanagement and misappropriation of customer funds.
Despite the extensive marketing by founder Alex Mashinsky, about transparency, trust and high yields, customer funds were actually used to manipulate the price of the native CEL token. The lender bought back CEL tokens as it said it would to pay rewards, but sold them back in “private over-the-counter transactions”, thus creating the illusion of volumes. But the more important point might be that Celsius used customer deposits to pay rewards and withdrawals to other customers, which in itself is the definition of a Ponzi scheme.
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