Crypto Firm Wintermute Entangled in Lawsuit Against Celsius Network

Source: Adobe/CanvaCreditors of the bankrupt landing firm Celsius have amended their lawsuit to include Wintermute

Plaintiffs in the class-action lawsuit against Celsius Network have now alleged that Wintermute helped the crypto lending firm in wash trading.

The new court filing shows Wintermute Trading Ltd as a new defendant in the ongoing class-action lawsuit, Bloomberg reported

Celsius utives allegedly engaged in “improper market making” activities with the help of Wintermute from around March 2021 until June 2022, when the crypto lending firm froze withdrawals

Celsius utives Allegedly Manipulated CEL Prices

The latest amendment in the lawsuit alleges that Celsius CEO Alex Mashinsky and other utives manipulated CEL prices through wash trading with the help of the algorithmic trading firm Wintermute

With the latest court filing, Celsius’ creditors have now also added “wash trading” to the list of charges against the bankrupt firm.

Wash trading refers to an illegal activity where the same crypto or any security is sold and bought to generate misleading market information

The new allegations directly affect the people who suffered losses from purchasing Celsius Financial Products through a Celsius Earn Rewards Account and subsequently filed a class-action lawsuit against the firm

According to the filing in the ongoing lawsuit in the United States District Court for the District of New Jersey, the alleged wash trading accusations were found through “publicly available internal conversations” between Celsius utives.

Before filing for bankruptcy, Celsius reportedly transferred nearly $160 million worth of wrapped Bitcoin to third-party wallets. Several of those addresses are reportedly controlled by Wintermute.

Celsius moved roughly $20 million worth of WETH into a Wintermute wallet in May, blockchain intelligence firm Arkham.

Fahrenheit Acquires Celsius’ Assets

As reported earlier, crypto consortium Fahrenheit won the bid to acquire the assets of Celsius, which were previously valued at $2 billion. As per the bid, Fahrenheit will acquire Celsius Network’s staked cryptocurrencies, mining unit, institutional loan portfolio, and other alternative investments

As per the agreement, the crypto consortium will receive a significant amount of liquid cryptocurrency, which is estimated to be between $450 million and $500 million.