Celsius investors allege Wintermute took part in wash trading, price manipulation
Bloomberg reports that class-action plaintiffs have accused one of the Celsius market makers of manipulating the market. June 23rd.
Wintermute Accused of Wash Trading
According to former Celsius investors, Wintermute was running wash trades to make Celsius look like its trading volume was higher than it actually was.
The text of the incident cited by Bloomberg read:
“…the wash trading activity has been corrupted” [Celsius’] All CEL token prices and reported trading volumes are based on strategic patterns designed to deceive investors. ”
Plaintiffs also allege that Wintermute helped Celsius CEO Alex Maskinski to support the value of Celsius’s CEL token after the collapse of Terra and Luna.
Plaintiffs said they discovered details of Wintermute’s alleged misconduct through an anonymous report conducted by an examiner prior to Celsius’ bankruptcy.
The source of the plaintiffs’ claims is unclear, but market data indicates that on May 4, 2022 (a few days before TerraUSD’s depeg), the price of Celsius’ CEL token was $2.18. The price of CEL dropped to low $0.28 on 13 June 2022, the same day that Celsius stopped its withdrawal. The price then surged to $3.81 in August 2022 before dropping again.
It’s also unclear what role Wintermute is playing as a market maker for Celsius, though reports have suggested a large deal between the companies.Arkham Intelligence reported Celsius wallet transferred $20 million ETH to Wintermute in May 2023.Report from Dirty Bubble Media to propose Celsius transferred 2,000 WBTC to Wintermute just days before bankruptcy in June 2022. CryptoSlate has not verified that data.
Wintermute denied all wrongdoing in a statement to Bloomberg.
Class action lawsuits have nothing to do with bankruptcy cases
According to Bloomberg, the lawsuit Kaplan vs Machineski22-cv-04560, United States District Court, New Jersey, also known as: Goins vs Celsius Network.
According to Bloomberg, the plaintiffs have added Wintermute as a defendant in the amended lawsuit, though no latest update appears to have been made public.
This lawsuit is separate from Celsius’ ongoing bankruptcy proceedings. The recent development of bankruptcy has led to Fahrenheit winning the auction of Celsius assets, marking the next step towards the company’s reopening and return of funds to creditors.
Celsius announced it had $5.5 billion in debt to customers near the start of bankruptcy proceedings in July 2022. Of this, the company owed $4.7 billion to its users.
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