U.S. Bankruptcy Judge Martin Glenn, who is overseeing the Chapter 11 case, in September appointed former prosecutor Shoba Pillay as an independent examiner. She investigated Celsius customers’ claims that the company was a Ponzi scheme and also reported on its handling of cryptocurrency deposits
Whether the insolvent cryptocurrency corporation Celsius Network is a Ponzi scheme will be the subject of a report by an examiner appointed by the court. The company’s founder and CEO, Alex Mashinsky, who is already charged with fraud, may feel the strain from the article.
In July of last year, the New Jersey-based Celsius Network filed for Chapter 11 protection from creditors in Manhattan after ceasing to provide withdrawal services to its customers. According to its balance sheet, the business has a $1.19 billion deficit.
Customers of Celsius Network claimed the business operated like a Ponzi scheme. In response, U.S. Bankruptcy Judge Martin Glenn named former prosecutor Shoba Pillay as an independent examiner in September to look into the claims and provide a report on the company’s handling of cryptocurrency deposits. The corporation agreed to the review after reaching a consensus.
Later, Examiner Pillay’s responsibilities were enlarged by Judge Glenn to include handling client concerns against Masinski. Letitia James, the attorney general of New York, filed a lawsuit against Masinski earlier this month accusing him of hiding the platform’s unfavourable status and deceiving investors of digital assets worth billions of dollars. According to Masinski’s attorney, his client disputes the charge.