Fresh allegations against Celsius renew calls for EU crypto compensation fund
Following recent scandals, especially those at the Celsius Network, petitions to the European Parliament for the creation of a crypto compensation fund are gaining momentum.
Jonathan Levy, the organizer of the petition, wrote that the EU must create a fund paid by “taxing” transactions to provide compensation to victims of crypto crimes.
Although Mr. Celsius has not been investigated, Levy claimed that the company was guilty of criminal misconduct.
Celsius is paying back the debt
On June 13, the cryptocurrency lending and borrowing platform suspended withdrawals due to “extreme market conditions”. A few weeks ago, there were rumors on social media that the company went bankrupt. At the time, CEO Alex Mashinsky denied.
Later, it became clear that Celsius was using his funds to trade high-risk, high-leverage transactions and was stuck during the market downturn.
Since July 1st, data on the chain shows that the company has been rewarded $ 183 million Crypto Twitter, a debt-backed securities against Maker, posted more cases of Celsius paying off other debt in the last few days.
* Update 1/3/22 * (Large payment ✅)
Celsius paid an additional $ 50 million for the Aave loan!
New Loan Health Ratio ~ 2.76
This is huge! @CelsiusNetwork We continue to strive to free our customers’ money. They are doing exactly what we want to see! 🔥 https://t.co/j1kLm1H0ow pic.twitter.com/bXXNTVxZKr
— ₿TCKYLE (@BTCKYLE) July 3, 2022
💥 Just Inn: Celsius paid $ 120 million #Bitcoin loan.
The new clearing price is $ 4,966. 🤔
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) July 5, 2022
💥 Just Inn: Celsius paid another $ 40 million #Bitcoin loan. The new clearing price is $ 2,722.
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) July 6, 2022
Co-founder of Onchain Captial Run Neuner I asked Twitterverse if anyone knew where Celsius was making money.
As a private company, the details of Celsius’ financial situation are unknown. However, these proactive measures give hope to users whose funds are trapped in the platform.
New claims emerge
Collection Initially, he submitted a petition for a compensation fund to cover the losses caused by the crime.Previously he was lobbying European CommissionOn behalf of his client, about issues with the OneCoin scandal.
Due to the multi-jurisdiction of cryptocurrencies, the petition is that victims of cryptocurrency can use the usual methods such as “legal proceedings in domestic courts, criminal charges against domestic authorities, bank transfers, credit card cancellations”. Claims that compensation cannot be sought.
Therefore, compensation funds are needed to directly support victims of crypto crime and fulfill the EU’s obligation to oversee the digital asset market.
At this stage, the events in Celsius have not been investigated. The consensus is that the company’s suffering was the result of mismanagement, not a deliberate attempt to deceive investors.
Nonetheless, Levy claimed in an email sent to CryptoSlate Celsius worked with his caretaker, Fireblocks, to cover up the “dangerous rehypothesis practice” for over a year.
In addition, both parties allegedly misunderstood users about insurance and gave their customers a false sense of security by issuing misleading and contradictory reports.
“The claim by Celsius about the existence of insurance is a typical misdirection by Mr. Machineski. Such insurance that may exist is that of Celsius’s reckless lending practices and its administrator, Fireblock. Does not protect investors from default. “
Celsius He states that he does not operate an insurance plan. However, Fireblocks will insure digital assets that Celsius keeps refrigerated.
“But we generate interest rewards by developing assets. If these assets are not under the control of Celsius, we cannot insure them with such insurance.”
In other words, these crypto assets are not subject to loss if they are “expanded” for yield generation in Celsius.
Establishment of cryptographic compensation fund
On behalf of a network of individuals and businesses that have lost a total of € 10 billion, including “millions of euros” of clients frozen by Celsias, Dr. Levy has industry funding to compensate victims of crypto crimes. We propose a “super fund” by.
Funds are paid by implementing “Unobtrusive .0001 cents / €” for each crypto transaction. Dr. Levy said the proposal is feasible given that “recently, the amount of crypto assets per day has risen to € 2 trillion.”
according to CoinMarketCapOver the last 24 hours, we have seen a volume of $ 64.2 billion worldwide.
At this stage, it is unclear whether the proposal is only for transactions that take place within the EU. If so, if EU Parliament implements this proposal, there may be a gap between expectations and actual “taxable” charges.
Levy has been contacted for clarification but has not yet responded.
