Celsius Network, a lending company, is facing claims that it made CEL purchases worth $558 million using customer deposits.
Celsius purchases spikes demand
Cam Crews, on Twitter, mentioned that in previous posts, Zach Wildes, Celsius Network’s head of community, claimed Celsius’ improper sales of $558 million in customer deposits to purchase $CEL did not pump the price.
The reason was that the platform decreased the CEL treasury by an undisclosed amount, according to Crews.
Celsius Network set the CEL supply at 700 million, and to this day, it still owes 378 million CEL.
Celsius has been buying every CEL token at least once and spending over fourteen times its 2019 market cap on purchases. As a result, demand increased and CEL prices have risen.
Meanwhile, a prior report visualizes the correlation between the Celsius purchases and the price. The report supports the hypothesis that the platform’s purchases increased the CEL prices.
In addition, employees intentionally purchased CEL to enable a surge and admitted to the action. Johannes Treutler, Senior Token Analyst at Celsius, put it as “prices drive prices.”
As Crews puts it, Celsius changed the public perception of CEL, contributed to fraudulent purchases, and tricked customers into OTC purchases.
In a later tweet, Crews added that Celsius made their “largely inadequate” account reconciliations for institutional loans and collateral payable or receivable using Instilend, a software owned by Anthony Napolitano’s parent company, Investview Inc.
Celsius allows customers to withdraw funds
After suspending the withdrawals for 265 days since June last year, the platform has now allowed its customers to withdraw assets.
The company sent an email to customers with details on eligibility to withdraw last month, stating that customers holding their funds in Custody Accounts would be eligible.
The eligible customers can withdraw up to 94% of their funds, with the 6% contingent on the outcome of future hearings.
As for customers that had transferred funds to Earn accounts, they have a withdrawal limit of 72.5%. In addition, there is a maximum of $7,575 for each withdrawal.