From Nasdaq
January 29, 2025 4:01:01 pm:

In 2025, the cryptocurrency market is booming, but former “crypto bank” Celsius Network collapsed due to fraud and market manipulation schemes, freezing $4.7 billion in assets. Investigations by the DOJ, SEC, and CFTC revealed deeper issues behind the collapse, challenging the crypto industry’s integrity. Former CEO Alexander Mashinsky pleaded guilty to multi-billion-dollar fraud.

Celsius Network rose quickly, offering high returns on customer assets, but it all came crashing down in 2022. Following the TerraUSD-LUNA collapse, Celsius faced liquidity issues, leading to a $4.7 billion hole in their balance sheet. Investigations uncovered misrepresentations, fraud, and market manipulation within the company, shaking the crypto world.

The DOJ case against Celsius revealed widespread fraud and misrepresentation, highlighting the company’s financial instability. The SEC filing exposed internal communications showing a lack of profitable services and a dire lack of planning. Market manipulation centered around Celsius’ proprietary token CEL, where the company propped up its value through various deceptive practices.

Regulatory updates in 2025 include the SEC appointing Mark T. Uyeda as Acting Chairman, focusing on investor protection and capital formation. A new crypto task force aims to develop clear guidelines for crypto assets. The CFTC elected Caroline D. Pham as Acting Chairman, emphasizing innovation and fair competition. The Federal Reserve withdrew from the NGFS, impacting green finance efforts.

Recent fines and enforcement actions include the SEC charging investment advisers and broker-dealers for failing to maintain electronic communications. The CFTC ordered Gemini Trust Company to pay a $5 million penalty for false statements. The FCA fined Arian Financial LLP for inadequate financial crime controls. Mosaic Exchange Ltd. faced penalties for a fraudulent scheme.

Explore the 2024 Global Compliance Survey to understand key insights into the financial industry’s current state and compliance landscape. Gain valuable knowledge about regulatory compliance and technological advancements shaping the industry. Learn about MiCA Regulation to ensure your firm is compliant with the evolving regulatory framework for crypto-assets.

Read more at Nasdaq: Regulatory Roundup: The Fraud and Market Manipulation Behind the Crypto Bank-Run