The collapsed crypto lender Celsius Network “is deeply insolvent,” alleged the U.S. state of Vermont’s Department of Financial Regulation (DFR), noting that the lender lacks the assets and liquidity to honor its obligations to account holders and other creditors. DFR has joined a “multistate investigation” into the troubled crypto lender and issued a warning. Besides Three Arrows Capital (3AC) and Voyager Digital, Celsius is one of the big crypto schemes that imploded in the Crypto Winter environment.
“The Department believes Celsius is deeply insolvent and lacks the assets and liquidity to honor its obligations to account holders and other creditors. Celsius deployed customer assets in a variety of risky and illiquid investments, trading, and lending activities,” DFR said in the warning. “Celsius compounded these risks by using customer assets as collateral for additional borrowing to pursue leveraged investment strategies,” the warning continued.
The regulator said that Celsius has not properly disclosed critical information, namely the platform’s financial condition, investing activities, risk factors, and ability to repay its obligations to depositors and other creditors, according to a consumer alert posted today. “Previous representations made by the Company, its CEO, and other Celsius representatives about the safety of customer funds and the company’s ability to meet withdrawal obligations are untrue,” said the notice.
