Celsius, FTX feel investors’ wrath as lawsuits multiply

The stunning collapse of Celsius and FTX destroyed many lives – early adopters who had the foresight to understand the unique value propositions of Bitcoin (BTC) and crypto were practically left with nothing when both platforms stopped withdrawals, shuttered their doors and finally filed for bankruptcy. While there is still hope that creditors will be able to recover, the road to recovering financial losses is expected to be long. While they wait, creditors gather to sue the company for various alleged violations.

Crypto Biz this week investigated a new lawsuit targeting Celsius co-founder Alex Mashinsky and several venture capital firms that backed FTX during previous investment rounds. We also reviewed the latest news from the United States Securities and Exchange Commission (SEC) and ended on a positive note regarding potential blockchain use cases.

Celsius’ creditors committee proposed suing Mashinsky, another Celsius executive

Once the darling of yield-seeking crypto investors, bankrupt lending platform Celsius has been accused of “fraud, negligence, mismanagement and self-interested conduct” by its customers. In the complaint filed in the bankruptcy court on February 14, lawyers representing the creditors of Celsius proposed to sue co-founder Alex Mashinsky and other former executives for such misdeeds. “Mr. Mr. Mashinsky, Mr. Leon, Mr. Goldstein, Mr. Beaudry, Ms. Urata-Thompson, and Mr. Treutler breached their fiduciary duty to Celsius,” the lawyer wrote about the Celsius executive. -what to fix the problem.” It looks like Mashinsky’s problems are just beginning.

Sequoia Capital, Paradigm among VCs facing ‘difficult’ FTX investor lawsuits

Customers of the bankrupt crypto exchange FTX turned their attention to the platform’s financiers and promoters to recover some of the huge losses they had incurred. According to Bloomberg, FTX users have filed a class-action lawsuit against venture capital firm Sequoia Capital and private equity firms Thoma Bravo and Paradigm – all three firms involved in FTX’s massive $900 million Series B round in July 2021. Meanwhile, a separate class -claims filed in California February 14 alleged that Silvergate Bank and CEO Alan Lane are responsible for “aiding and abetting” Sam Bankman-Fried in committing fraud. It looks like the venture capital and business backers of FTX will feel the failure of the exchange.

SEC to target crypto companies operating as ‘qualified custodians’ – Report

The United States should always be the bedrock of innovation and first-mover advantage. In the case of crypto, however, regulators will come down with an iron hand. In addition to stablecoins and staking protocols, the SEC is reportedly looking for “qualified custodians” in regulatory guidance and enforcement actions. According to Bloomberg, the SEC is working on a proposal that would make it difficult for crypto companies to be “qualified custodians” on behalf of their clients. In practice, this could prevent hedge funds and private equity funds from continuing to work with crypto custodians.

Siemens issues $64M digital bond on public blockchain

Blockchain use cases may have been extended to bond offerings after German engineering company Siemens issued digital bonds using distributed ledger technology. On February 14, Siemens announced that it was selling $60 million in digital bonds directly to investors, including DekaBank, DZ Bank and Union Investment. The company says blockchain-based bonds have several advantages compared to traditional bond sales. “For example, creating paper-based global certificates and clearing centers is unnecessary,” Siemens said. “What’s more, the bonds can be sold directly to investors without the need for a bank as an intermediary.” It is important to note that these bonds are still paid using traditional methods because the digital euro is not yet available.

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