Celsius Had Been Insolvent Since 2019: Vermont Regulator

Vermont state officials have asked for broader powers to investigate Celsius, alleging that the troubled cryptocurrency exchange artificially inflated the price of its CEL token at the expense of retail investors going back over three years.

“By increasing its Net Position in CEL by hundreds of millions of dollars, Celsius increased and propped up the market price of CEL, thereby artificially inflating the company’s CEL holdings on its balance sheet and financial statements,” Vermont assistant general counsel Ethan McLaughlin declared in the Wednesday filing.

“Excluding the Company’s Net Position in CEL, liabilities would have exceeded its assets since at least February 28, 2019,” he continued. “These practices may also have enriched Celsius insiders, at the expense of retail investors.”

The document was filed in the United States Bankruptcy Court, Southern District of New York, where Celsius filed for Chapter 11 protection in July. According to Vermont officials, Celsius—through its CEO Alex Mashinsky—made false and misleading claims to investors about the company’s financial health, profitability, ability to meet its obligations, and compliance with securities laws.