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Was Celsius just a Ponzi after all?

by SuperiorInvest

Cryptolender Celsius was one of the biggest victims bear market. After halting withdrawals for months due to “extreme market conditions,” the troubled lender is officially filed for Chapter 11 bankruptcy July 13th. Now, a federal judge overseeing the bankruptcy proceedings has ordered investigators to determine whether the company operated as a Ponzi scheme. Disgruntled customers of Celsius have clearly argued that the company’s business operations meet the legal definition of a Ponzi scheme. After all, it didn’t take long for Celsius’ business model to crumble under the volatility. This is one case we should all be watching very carefully.

In this week’s Crypto Biz, we revisit the Celsius debacle. We also examine Binance’s investment in Elon Musk’s Twitter deal and MicroStrategy’s renewed commitment to Bitcoin.

A judge orders a probe to investigate whether Celsius was a Ponzi scheme

In finance, a Ponzi scheme is a fraudulent investment practice where returns are generated and paid to existing investors using money from later investors. Allegations of Ponzi have now been withdrawn from Celsius by its former customers, who say the firm used the assets of new users to pay out returns and facilitate withdrawals from existing users. The allegations are being taken seriously by federal judge Martin Glenn, who has ordered the case investigator and the Celsius Creditors Committee to thoroughly investigate the matter. Glenn said he was “shocked” to see the adjustments made by Celsius related to the Oct. 11 proposal outlining employee bonuses. This one could be explosive.

Twitter monetization and free speech lead to Binance’s $500 million injection — CZ

Crypto exchange Binance was one of several firms that helped with the funding Elon Musk acquisition of Twitter for 44 billion dollars. Binance gave away $500 million to help finance the initiative, with CEO Changpeng “CZ” Zhao touting Twitter’s monetization potential and eventual move to Web3 as the main reasons for the investment. Of course, CZ expects to get its money back one day — even though Twitter has only occasionally turned a profit since its 2013 IPO. I wouldn’t hold my breath, CZ.

MicroStrategy CEO reiterates bitcoin ‘long-term’ play in Q3 earnings

Business Intelligence MicroStrategy has no plans to unwind its massive exposure to Bitcoin and will continue to invest in the digital asset for the long term. This commitment did not come from Michael Saylor, who resigned as CEO focus on bitcoin in august (BTC) evangelization, but from the new boss of Phong Le. “We haven’t sold any bitcoin to date,” Le said during MicroStrategy’s Q3 earnings call. “To reiterate our strategy, we are looking to acquire and hold bitcoins for the long term. And we have no plans to sell bitcoins at this time.” MicroStrategy reported a net loss of $27.1 million for the quarter.

Moneygram, which will allow users to buy, sell and hold cryptocurrencies through a mobile app

Fresh on the adoption front: the digital payments company MoneyGram announced that nearly all of its customers in the United States can buy, sell, and hold cryptocurrencies through its mobile app. The company will initially support Bitcoin, Ether (ETH) and Litecoin (LTC) transactions with plans to add more crypto assets in 2023. MoneyGram’s global audience is more than 150 million people. If cryptocurrency adoption takes off in the United States, we could see similar support roll out around the world. However, this will depend on regulations, the company said.

Before You Go: Why Was Dogecoin Pumping This Week?

The cryptocurrency market rallied by the end of October thanks to the popular memecoin Dogecoin (DOGE) increase of 150% on the back Elon Musk bought Twitter. Are we still in a bear market or has the situation reversed? In this week’s Market Report, I sat down with Marcel Pechman to discuss how Musk’s Twitter purchase could affect cryptocurrency and whether we’re nearing the bottom of this cycle. You can watch the full recording below (spoiler alert: I’m not very optimistic):

Crypto Biz is your weekly pulse of the blockchain and cryptocurrency business, delivered straight to your inbox every Thursday.

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