Supervision review: Fraud and market manipulation behind the operation of encrypted banking
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Crimio -fraud and market manipulation operated by encrypted banks
By 2025, we found that we rode the tail wind of cryptocurrencies, Bitcoin exceeded $ 100,000, Yunmu entered the European Union, and announced several new plans under the new US government. I have taken this opportunity to reflect on one of the largest cryptocurrencies in 2022. Former Crypto’s “bank”, Celsius Network, his former CEO recently pleaded guilty to the billions of dollars of fraud and market manipulation plans.
This is one of the biggest cryptocurrencies that we have ever seen. After the investor suddenly stopped all the withdrawal of withdrawals, investors frozen $ 4.7 billion in crypto assets. Although its slogan “liberated itself” is ironic that the Futures Trade Commission (CFTC) subsequently revealed that more things happened below.
The rise and fall of the Celsius
Before sneaking into fraud and market manipulation, let us quickly understand the rise and fall of Celsius. According to their archive website, the website is a window to enter the 2020 cryptocurrency landscape, all of which began in the coffee napkin in 2017. The website has evolved into a cryptocurrency asset platform that monitored customers with cryptocurrency assets and allowed them to get a repayment or receive these assets to their guarantee loans in these assets. The main attractiveness of the platform is the “earning” plan, which enables CelSius to invest in customer assets and reach a point of return to 18 %. By 2021, CELSIUS estimates that it holds $ 25 billion in assets; however, the CFTC application later suspected the number.
All of this collapsed in June 2022. The collapse of Terrausd-LU NA last month shocked the market, causing people to continue the liquidity problems of Celsius and the continuous rumors of investment losses. These rumors have been rejected until June 13, Cerius suddenly suspended all customers’ withdrawal. One month later, the company applied for bankruptcy, revealing that there was a huge loophole in its balance sheet, and 600,000 unsecured deposits owed $ 4.7 billion. At that time, most comments attributed it to classic banking operations. However, the next year’s DOJ, SEC and CFTC surveys showed that there are more things that happened behind the scenes than people realized.
“No hope … no plan”
Last month, the Ministry of Justice, which was convicted, revealed that there were two fraud cases in the earlier timetable. First of all, most business and risks are false. Although we will not experience all false statements, the abstract is clear: you will not get a reward of 18 % of the low risk. It is shocking. The CFTC case made quite a lot of false statements. The SEC application also includes some information revealed, from “we have no favorable service” to “the current business model is financially unsustainable” to an incredible “no hope … no plan … no plan “” ”
Support a proprietary token
The second part of the case revolves around the market, which is more complicated. This operation is related to the cryptocurrency of Celsius. It is interesting to achieve this goal. Pay a part of interest (or reward) to investors, which is paid by CEL, which keeps it at a high level of CEL in the interest of CELSIUS. CEL is also traded in the secondary market, and the public’s view of business success is closely related to the success of the CEL token. A employee wrote, “the higher the price of the CEL”, “people know that the Celsius company is a legal company and attracts customers.”
Caers supports several prices. First, it uses the company’s funds, including the depositor’s funds to purchase CEL. SEC files show that the CEL purchased is much more required than interest and reward expenditure.
CELSIUS staff also designed a plan to use its own OTC table to help funding and hidden activities. The transactions on the CELSIUS platform are only reflected in internal records, not among the blockchain or other users on the platform. The SEC application pointed out: “CelSius will sell CEL through non -public OTC desk, and use income to turn and repurchase CEL through public means and increase its price.”
Then sell this CEL to the non -public OTC table. In some cases, Celsius will strategically speaking this activity. In this event, its public purchase will increase confidence and provide sufficient prices for its non -public OTC sales to earn considerable profits.
This case is a good example of many fraud and poor management in a company. The most important thing is that the manipulation part shows the unique challenges and risks that appear when the platform emits and runs its own token. These are the challenges we need to ensure in the new encryption wave.
Capital market supervision update
January 21: Second It is announced that President Trump has specified Mark T. Uyeda as an agent chairman of the SEC. He has been a commissioner since 2022 and has served as various positions since 2006. The mission of the SEC is to protect investors, maintain a fair market and promote capital formation.
January 21: Second Acting Chairman Mark T. Uyeda has established a new encrypted working group to formulate a clear guidelines for encrypted asset supervision, thereby getting rid of the SEC’s previous method of law enforcement. The work team aims to establish a actual registration path and a wise disclosure framework, and at the same time coordinate with other regulatory agencies, and collect the opinions of various stakeholders.
January 20: Member CFTC Caroline D. Pham, a unanimous election, served as the acting chairman. Acting chairman Pham aims to re -pay attention and change the direction of new leaders to fulfill the legal authorization of CFTC to promote the responsible innovation and fair competition in the market that is constantly developing in our market.
January 17: Federal Reserve Commission It is announced to withdraw from the supervisor of the central bank network and the Green Financial System (NGFS).
January 17: Autoritédesmarchés Financial House (AMF) It announced the actions and supervision priorities in 2025. The operation was consistent with its “influence of 2027” strategic plan and focused on 13 priority operations in six strategic fields including market supervision, investors’ protection and sustainable finance.
January 16: Bermuda Monetary Administration (BMA) Released the business plan of 2025, outlined the commitment to enhance the regulatory framework and ensure operating efficiency, and focus on the green plan, digital innovation and customer protection.
January 15: World Economic Forum (WeF) The 20th edition of the global risk report was published, revealing the increasingly broken global landscape, where geopolitical, environment, social and technical challenges have been continuously upgraded to threaten stability and progress.
Fined and law enforcement operations
Regulatory authority Bourse demontréalinc. (“Bourse”) Fined a financial service company $ 113,000, plus the cost of $ 8,000, and allowed 9 employees to visit unauthorized from 2019-2023.
Hongkong Independent Anti -Corruption Commission (ICAC) accused a former SFC deputy director conspiracy to commit justice. Previously, the former deputy director allegedly manipulated the market to provide suggestions on how to deal with investigations and damage evidence.
U.K. Financial behavior authorities (FCA) was fined Arian Financial LLP £ 288,962.53 due to insufficient financial crime control. The case marks the seventh law enforcement operation of the FCA’s CUM-EX transaction, and the total fine is currently more than 22 million pounds.
this CFTC The order Gemini Trust Company fined US $ 5 million in the US District Court because he issued false or misleading statements to the committee in 2017 on the Bitcoin futures contract certification.
this CFTC It was announced that the Florida District Court made a final default judgment on the Mosaic Exchange LTD. and its CEO to deceive the fraud digital asset plan of 18 people. The defendant was ordered to pay about 1.2 million US dollars for a total fine and compensation, and permanently banned the market that was regulated by CFTC.
this Second The former Pfizer statistics and their business partners were finalized. Before Pfizer announced in 2021, after the PAXLODID announced in 2021, these people were sentenced to insider transactions through transactions to earn $ 214,395 and profit of $ 60,300, respectively.
this Second The nine investment consultants and three brokers were accused of failing to maintain and preserve electronic communication. These companies acknowledged illegal violations and agreed to pay a total fine of $ 63.1 million.
this Second Due to insufficient surveillance and survey of suspicious trading activities for customers, the brokerage dealer Speedroute LLC received from 2020 to 2023. Without admitting or denying the results of the investigation, Speedroute agreed to pay a fine of $ 600,000 and was condemned by SEC for violating the requirements of the trading bill.
this Second It is announced that Robinhood Securities LLC and Robinhood Financial LLC have agreed to pay $ 45 million in civil fines to solve multiple regulatory violations, including suspicious activities, identity theft, network security and record preservation requirements.
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