A former Celsius executive revealed that the company may have manipulated CLE token price. Timothy Cradle started working at Celsius for 2 years as a anti money laundering (AML) analyst.Cradle was then promoted to Head of Monitoring and then Director of Financial Crimes Compliance for 3 months.Going back to 2019, Cradle said he heard senior executives discussing CEL at a Christmas party. He heard the executives discussed deliberate price movements, which he found disturbing.While there are rules against market manipulations, there are no specific rules to cryptocurrencies.Cradle told CNBC that Celsius allegedly manipulated CLE price by triggering a rally. “I don’t know what better way to phrase it. But they were in the market, they were actively trading and increasing the price of the token,” said Cradle.He added that Celsius compliance department was understaffed with limited resources.’Mining Out of Debt’ PlanCelsius applied for Chapter 11 earlier this month. The company owes its users $4.7 billion. The rapid decline in Bitcoin and the company’s misjudgment of clients’ growth lead to the bankruptcy.
source: law firm Kirkland & EllisFrom the above document it appears Celsius was unprepared for a downturn in the crypto markets. $720 million are tied to mining equipmentCelsius is planning to use bitcoin mining to pay off its debt. The crypto firm asked the court for an approval of $5 million for completing the construction of the mining rigs in Texas, which may take 60 days to complete).It has been estimated that 43,000 mining rigs will be deployed initially and a total of 112,000 rigs will be available in mid 2023. Celsius is expecting it will earn 14.2 BTC per day and a total of 10,100 BTC in 2022.The next hearing will take place on 10 August 2022.Mining your way out of debt will require Bitcoin to hold onto its current levels if not higher. A depreciation in BTC price may burden the company’s ability to pay off its debt.
This article was written by Matti Williamson at www.financemagnates.com.
