The U.S. Federal Trade Commission (FTC) fines bankrupt company Celsius Network $4.7 billion, former CEO arrested

The U.S. Federal Trade Commission (FTC) fined bankrupt company Celsius Network $4.7 billion, and its co-founders are also facing allegations of asset misappropriation issued by federal courts.

FTC Delays Fine, Requires Celsius Network to Repay Users First

The bankrupt crypto lending company Celsius Network has been fined $4.7 billion by the U.S. Federal Trade Commission (FTC). However, the implementation of the fine will be delayed to allow Celsius to return its remaining assets to consumers in the bankruptcy process.

Celsius Permanently Prohibited from Providing Cryptocurrency Services

According to a statement on July 13, Celsius based in New Jersey and its affiliates are permanently prohibited from "offering, marketing, or advertising any product or service for depositing, exchanging, investing, or withdrawing any assets." The company had sold various cryptocurrency products and services to consumers, such as interest-bearing accounts, personal loans secured by their cryptocurrency deposits, and cryptocurrency exchanges.

Co-founders Face Federal Court Charges: Misappropriation of Assets

In the FTC's complaint, co-founders Alex Mashinsky, Shlomi Leon, and Hanoch Goldstein are accused of promoting the platform to consumers as a "safe place" to deposit cryptocurrency while misappropriating over $4 billion of consumer assets.

Additionally, the FTC also accuses Celsius of making $1.2 billion in unsecured loans and falsely claiming to have a $750 million insurance policy. The co-founders have not reached a settlement, and their cases will continue to be litigated in federal court. Meanwhile, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have also filed lawsuits against Celsius, with Mashinsky being detained by the U.S. Department of Justice on seven counts of fraud.

Co-founders Have Been Inactive on Social Media Since March, Currently Arrested

Co-founder Alex Mashinsky has not posted publicly on Twitter since commenting on the Silicon Valley Bankruptcy in March this year. It is reported that Alex Mashinsky has been arrested.