### According to an independent examiner working for the United States Bankruptcy Court in New York, the defunct cryptocurrency lender Celsius Network followed the textbook definition of a Ponzi scheme by using funds from new clients to pay for withdrawals made by existing customers.

According to a report by an independent examiner appointed by a court in the United States, Celsius had exploited the deposits made by its consumers to boost the value of the CEL token. The independent examiner further added that Celsius Network took funds from new customers to cover withdrawals from existing clients.


Celsius Network was a cryptocurrency lender that provided users with an opportunity to earn interest on their cryptocurrency holdings by depositing them into the platform. The company provided loans to institutions using the deposited cryptocurrency as collateral and returned a portion of the interest earned to depositors.


Through the Earn product on the Celsius platform, the company offered investors considerable returns on their investments and these returns would be generated by earning a high yield on the investors' lent cryptocurrency assets through the platform's ostensibly over-collateralized loans.


Celsius halted withdrawals in June 2022 due to extremely tumultuous market conditions. When the company stated that this was required to stabilize operations and liquidity, rumors began to spread that things were as bad as they appeared to be. Nevertheless, a month later, the now-defunct crypto lending platform filed Chapter 11 bankruptcy filing, revealing a $1.02 billion hole in its balance sheet.

A few weeks before the now-defunct cryptocurrency lending firm froze customer withdrawals in May 2022, the company's former CEO Alex Mashinsky withdrew $10 million from the company’s account.




According to an independent examiner working for the United States Bankruptcy Court in New York, the defunct cryptocurrency lender Celsius Network followed the textbook definition of a Ponzi scheme by using funds from new clients to pay for withdrawals made by existing customers.

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