Since the collapse of FTX, scandals have multiplied. The latest involves manipulating the prices of Celsius’ native token, CEL. Celsius creditors even asked a bankruptcy judge to subpoena FTX for information on suspicious transactions involving CEL between April and August last year. The consequences could be disastrous.
FTX involved in investigation of suspicious CEL token transactions
In July 2022, the Celsius Network lending platform sank into a resounding bankruptcy, filing for Chapter 11 in the United States. Since then, events have unfolded at breakneck speed. The aggrieved customers are still waiting for the refund. As the company heads to an auction, tech giants are vying for the platform and showing interest in acquiring it.
However, a shadow hangs over this incredible story: creditors suspect crypto market manipulation through dodgy CEL token trades on FTX platform.
In a document court order filed in the Bankruptcy Court for the Southern District of New York, Celsius creditors hold FTX to account in bankruptcy judge due to suspicious transactions.
If these allegations are proven to be true, it could tarnish Celsius Network’s reputation and lead to legal action against those involved.
Suspicious CEL token transactions: ongoing investigation
In order to elucidate this case, the committee representing the creditors mandated the company Elementus Inc.., a blockchain specialist, to investigate these suspicious CEL token transactions.
As part of this mission, she discovered 947 transactions made over three daysbetween private wallets and wallets on the FTX exchange, in connection with deposits and withdrawals of CEL tokens.
According to the report, there were 947 suspicious transactions involving the CEL token between June 12 and July 13. This period corresponds to when Celsius had frozen withdrawals from its customers before its declaration of bankruptcy on July 13. At that time, the price of the token was estimated at 81 cents.
These transactions are being challenged in Celsius’ bankruptcy proceedings.as the company proposed a 20 cent valuation for the CEL token in its Chapter 11 restructuring plan.
However, the price of 81 cents did not reflect the fair market value of the token at that time. The creditors therefore requested information from FTX to determine the legitimacy of these transactions. Unfortunately, according to Bloomberg, the exchange refused to cooperate.
Celsius creditors are continuing their investigation into whether CEL tokens were manipulated through FTX accounts. For that, they seek to obtain the complete transaction history for user accounts associated with FTX wallets. This information would allow them to determine whether the movements of these tokens were made legally or if they were manipulated to artificially increase their price.
The development of this case should be closely monitored, especially since it risks further damaging the reputation of Celsius, which is to be auctioned off.
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