Celsius Network’s Creditor Committee Requests FTX Subpoena for Investigation into Suspicious Trading Activities

04/27/2023 01:51 • Metaverse Matters • 71 views

On April 27th, the creditor committee of Celsius Network LLC requested on Wednesday that the bankruptcy judge allow FTX to be subpoenaed to provide information to identify the users behind ten encrypted wallets, which they claimed were involved in suspicious trading patterns of CEL tokens between April and August last year. (Bloomberg)

Celsius creditors seek to identify the information of dozens of FTX users involved in suspicious transactions with CEL tokens last year

Introduction

On April 27th, the creditor committee of Celsius Network LLC filed a request with the bankruptcy judge to subpoena FTX, one of the world’s largest cryptocurrency exchanges, to identify the users behind ten encrypted wallets. The committee alleges that these wallets were involved in suspicious trading patterns of CEL tokens between April and August last year.

Background

Celsius Network is a digital platform that offers users the ability to earn interest on their cryptocurrency holdings. However, the company recently filed for bankruptcy after it was hit with multiple lawsuits alleging that it had violated securities laws. The lawsuits claim that Celsius Network sold unregistered securities to investors, which is a violation of federal law.
The creditor committee, which represents the interests of the company’s creditors, is conducting an investigation into Celsius Network’s activities leading up to the bankruptcy filing. As part of that investigation, the committee has identified ten encrypted wallets that it believes were used to manipulate the price of CEL tokens.

The Request for a Subpoena

The creditor committee has requested that the bankruptcy judge allow FTX to be subpoenaed to provide information about the users behind the ten wallets in question. According to the committee, FTX is the most likely source of information about the wallets because it is the only major cryptocurrency exchange that allows users to trade CEL tokens.
The committee alleges that the trading activity in the ten wallets was designed to drive up the price of CEL tokens, which would benefit certain individuals or groups at the expense of other investors. The committee claims that this activity was a violation of securities laws and contributed to Celsius Network’s financial problems.

FTX’s Response

FTX has not yet responded to the request for a subpoena. However, the exchange has previously stated that it takes compliance with securities laws very seriously and that it works closely with regulators to ensure that its users are not engaging in illegal activities.
Additionally, FTX has recently begun requiring users to complete KYC (know your customer) procedures before they can withdraw funds from the exchange. This is part of the exchange’s efforts to crack down on illicit activities on its platform.

Conclusion

The allegations of suspicious trading activities involving CEL tokens are the latest challenge facing Celsius Network. The creditor committee’s request for a subpoena of FTX is an attempt to shed light on these activities and to hold those responsible accountable.
While FTX has not yet responded to the subpoena request, it is likely that the exchange will cooperate with the investigation. As more information becomes available, it will be interesting to see what impact, if any, the investigation will have on Celsius Network and the wider cryptocurrency industry.

FAQs

1. What is Celsius Network?
Celsius Network is a digital platform that offers users the ability to earn interest on their cryptocurrency holdings.
2. What are CEL tokens?
CEL tokens are a digital asset that is used on the Celsius Network platform.
3. What are the allegations against Celsius Network?
Celsius Network has been accused of violating securities laws by selling unregistered securities to investors.

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/04/27/celsius-networks-creditor-committee-requests-ftx-subpoena-for-investigation-into-suspicious-trading-activities/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.