Creditors of bankrupt cryptocurrency lending platform Celsius have alleged that crypto market maker Wintermute assisted Celsius executives in manipula
Creditors of bankrupt cryptocurrency lending platform Celsius have alleged that crypto market maker Wintermute assisted Celsius executives in manipulating the prices of CEL (CEL) through the use of “wash trading.”
According to a June 23 Bloomberg report, citing a recent court filing, Celsius creditors have now amended their lawsuit in the United States District Court of New Jersey to include Wintermute as a defendant.
Wintermute, described in the filing as a “purported market maker in the crypto industry,” allegedly aided Celsius CEO and other executives to “unlawfully manipulate and profit from the illegal wash trading of unregistered CEL Tokens.” The filing stated:
“Defendant Wintermute and the Executive Defendants engaged in a scheme that artificially inflated the trading volume of the CEL tokens sold and marketed by Celsius.”
According to the filing, the alleged scheme involving Wintermute to “wash trade CEL tokens to influence the price” was uncovered through “publicly available internal conversations” among Celsius executives.
It further claimed that Celsius executives engaged Wintermute to be involved in these “improper market making” activities from around March 2021 up “until the Celsius froze withdrawals in June 2022.”
Related: Wintermute moves over $4M of Optimism tokens to Binance ahead of OP unlock
It was noted that Celsius had no measures put in place to prevent improper market making.
“The supposed controls were virtually non-existent, and those that did exist did not monitor for or protect against “wash trading” or self-dealing” it was stated.
The consortium obtained Celsius Network’s institutional loan portfolio, staked cryptocurrencies, mining unit and other alternative investments – almost a year after Celsius initially filed for Chapter 11 bankruptcy, in July 2022.
Cointelegraph reached out to Wintermute for comment, but did receive a response by time of publication.
Cointelegraph previously reported in May 2023 that crypto consortium Farhenheit was the successful bidder to acquire the assets of Celsius, previously valued at $2 billion.
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