Celsius Network Subpoenaed by U.S Prosecutors After Halting Withdrawal

Bankrupt crypto lender Celsius Network has disclosed that it was subpoenaed by United States prosecutors only a few days after it suspended withdrawal on its platform in June. Precisely, the subpoena was issued on the 15th of June 2022, only three days after the troubled Celsius Network stopped its users from gaining access to their saved funds.

The subpoena had come from the US District Court for the Southern District of New York. Document submission for its court filing during its bankruptcy process has exposed this information as a “regulatory agency inquiry or action[s]”. A subpoena which is a summon order from a court clearly shows the rigor which the crypto lender has been put through in the months following its withdrawal halt action. 

Celsius Network Claims Cooperation During Bankruptcy

Celsius Network is one of the firms that the crypto winter subjected to chaos.

Partly influenced by the collapse of the TerraUSD/LUNA in May which has sliced off about $2 trillion from the crypto ecosystem, the lender has since been struggling.

The crypto lender’s woes were compounded when it withdrew customers’ crypto assets and lent them out with a promise of mouth-watering rewards in return for its assumed investment.

At that time, Celsius Network held $25 billion in customers’ assets but by the time it was filing for bankruptcy, it owed customers $5.5 billion while holding assets worth only $4.3 billion. 

In response to all of this, Celsius has said Celsius said: “We are cooperating with all regulatory inquiries, and regulators are key stakeholders in our reorganization. We are not commenting as to the specific details of any inquiries.”

Additionally, the Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), and Federal Trade Commission (FTC) have also been on Celsius’ tail for a while now. Although they are only conducting civil investigations on Celsius Network rather than a criminal investigation.

For the CFTC, its enquires have been on trading activities involving Terra USD and LUNA in connection to the crypto lender. Another CFTC filing is “In the Matter of Certain Pending Persons Engaged In Fraud And Other Unlawful Conduct With Respect to Digital Asset Transactions.”