Celsius creditors allege Wintermute facilitated ‘wash trading’: Report

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Creditors of bankrupt crypto lending platform Celsius allege that crypto market maker Wintermute helped Celsius executives manipulate the price of Celsior (CEL) using “wash trading.”

According to Bloomberg on June 23 reportcited a recent court filingCelsius creditors recently amended a lawsuit in New Jersey federal district court, alleging that Wintermute worked with Celsius executives to engage in improper market transactions.

Wintermute, “a market maker in the cryptocurrency industry,” said that Celsius Network CEO Alex Mashinsky and other executives “manipulated illegal wash trading of unregistered CEL tokens, It is said that he helped them to get a profit.

Creditors claimed that both Celsius executives and Wintermute cooperated with “scientists in connection with the alleged manipulative activity.”

“Defendant Wintermute and Defendant executives were involved in a scheme to artificially inflate the trading volume of CEL tokens sold and marketed by Celsius.”

The alleged plot was uncovered through an “open internal conversation” between Celsius executives, according to the filing.

Furthermore, Celsius executives alleged that they had Wintermute involved in these “improper market-making” activities from around March 2021 until “Celsius freezes withdrawals in June 2022.”

It was reported that Celsius did not take any measures to prevent inappropriate market making.

“The envisioned regulations were virtually non-existent and, if they did exist, would neither monitor nor protect against ‘wash trading’ or self-trading,” it said.

This follows recent reports that Celsius Network assets were acquired through an auction.

Related: Wintermute Moves Over $4M Optimism Tokens To Binance Ahead Of OP Unlock

On May 25, it was reported that cryptocurrency consortium Farhenheit was the winning bidder to acquire Celsius assets previously valued at $2 billion.

The consortium has acquired Celsius Network’s institutional loan portfolio, staked cryptocurrencies, mining units and other alternative investments. This came in July 2022, almost a year after Celsius first filed for Chapter 11 bankruptcy protection.

Cointelegraph reached out to Wintermute for comment and received a response prior to publication.

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