Celsius creditors claim Wintermute aided wash trading

By: Henry Felix

Celsius creditors claim Wintermute aided wash trading

June 24, 2023 8:16 AM

Celsius officials allegedly used Wintermute to allow "wash trading" to "fraudulently" manipulate the volume of trading on the Celsius platform.

Creditors of the collapsed crypto lending company Celsius claim that Wintermute, a crypto market maker, helped Celsius officials manipulate the price of CEL via unlawful market trading.

Based on a June 23 Bloomberg report→ citing the latest court filing→, Celsius creditors have just revised the complaint they filed in the United States District Court for the District of New Jersey to argue that Celsius officials hired Wintermute to participate in wash trading.

Wash trading is a method of manipulating the market by making it appear as though a certain asset is trading at greater volume compared to what it is.


June 19 complaint in New Jersey's US District Court. Source: assets.bwbx.io.

The CEO of Celsius Network, Alex Mashinsky, and other officials are accused of having enlisted Wintermute's help to "illegally manipulate and profit from the illicit wash trading of unregistered CEL Tokens."

The creditors claimed that both the Celsius executives and Wintermute behaved "conscientiously in connection with the alleged manipulative acts." 

"Defendant Wintermute as well as the Executive Directors were involved in an operation which artificially raised the total trading volume of CEL token issued and promoted by Celsius."

The alleged plot was discovered through "publicly available internal conversations" between Celsius executives, according to the lawsuit.

It was also stated that Celsius management hired Wintermute to participate in these "improper market making" operations from March 2021 to "until the Celsius froze withdrawals in June 2022."


On June 19, a court filing was made in the United States District Court for the District of New Jersey. Source: assets.bwbx.io

Celsius was said to have no safeguards in place to prevent improper market making.

It was claimed that the purported controls "were virtually non-existent," and that those that did exist did not check for or prevent "wash trading" or self-dealing.

According to recent reports, an auction was recently used to buy the assets of Celsius Network.

On May 25, it was announced that the crypto consortium Farhenheit had won the auction to purchase the assets of Celsius, which had previously been valued at $2 billion.

Celsius Network's institutional loan portfolio, staked cryptocurrency, mining unit, and other alternative investments were acquired by the consortium almost a year after the company filed for Chapter 11 bankruptcy in July 2022.