US prosecutors have charged Celsius days after the blocking of withdrawals

The US prosecutors only charged Celsius Network for a few days after the now bankruptcy crypto loan in June had frozen customer withdrawals in one of several federal investigations around the company.

The summons were issued on June 15, as the lender announced last week in an insolvency court in Manhattan. Celsius had stopped the withdrawals three days earlier and captured the savings of hundreds of thousands of customers.

The court files stated that the summons were issued by a federal jury of the federal government in Manhattan. Grand Juries of the federal government are deployed by public prosecutors from the Ministry of Justice to carry out criminal investigations and possibly file charges.

The summons is a sign of the intensive examination that Celsius was exposed to this year when the once large crypto loan collapsed during a strong sale of cryptocurrency assets.

Celsius recorded crypto-assets and awarded them, promising breathtaking returns to customers who achieved it by using the tokens at the markets for digital assets. At peak times, it held $ 25 billion in customers of customers. The company registered bankruptcy in July because it owed $ 5.5 billion, but kept assets worth only $ 4.3 billion.

The details of what the summons called for are not disclosed in the submission of October 5. The summons were included in a list of "Inquiries or measures by the regulatory authority" as a broader disclosure of the company's financial matters.

Celsius said: "We cooperate with all official inquiries, and the supervisory authorities are important interest groups in our restructuring. We do not comment on the specific details of inquiries."

A lawyer of the former CEO of Celsius, Alex Mashinsky, who had resigned last month, did not comment because the summons were not issued. The U.S. Attorney General of Manhattan rejected a statement.

The bankrot crypto loan has to deal with inquiries from several other federal authorities, as court files show. This includes the Securities and Exchange Commission, Commodity Futures Trading Commission and the Federal Trade Commission. The three authorities carry out civil law than criminal investigations.

The CFTC examinations are described as "fraud and other illegal behavior in relation to transactions with digital assets" and separately as "certain trading activities with terrausd (VAT) / luna".

Ust and Luna were two interconnected tokens that collapsed in May and triggered a wave of subsequent bankruptcies in the entire crypto industry. Celsius said that it avoided considerable losses in VAT and Luna trading by ending its business when the tokens collapsed.

The examinations of the doj, the CFTC and the FTC were not previously reported. In July, the Financial Times revealed that Celsius' Sec had requested records of certain businesses of its top executives. Bloomberg reported in January that the company was involved in a more comprehensive examination of the SEC via crypto creditors.

kadhim@ft.com