Source: Cointelegraph | Category: Cryptocurrency
Former Celsius Network co-founders Daniel Leon and Nuke Goldstein have agreed to pay more than $6 million combined to settle Federal Trade Commission charges related to the collapsed crypto lender’s deceptive practices. The settlements add to former CEO Alex Mashinsky’s $10 million FTC settlement in April, bringing total founder-level penalties to over $16 million.
According to the FTC complaints, Leon and Goldstein participated in a scheme that misled hundreds of thousands of retail depositors about the safety and yield of Celsius’s “Earn” program. The platform promised high interest rates on crypto deposits while internally using customer funds for risky trading, uncollateralized loans, and proprietary market-making activities.
“The defendants built a house of cards on false promises,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “They marketed Celsius as a safe haven for crypto assets while gambling with customer deposits behind the scenes.”
Leon will pay $4.5 million and Goldstein $1.8 million, with both subject to suspended judgments that could become due if they misrepresent their financial condition. Neither admitted nor denied the allegations. The settlements bar both from offering financial products or services and require cooperation with ongoing investigations.
Celsius froze withdrawals in June 2022 and filed for Chapter 11 bankruptcy a month later, leaving over 600,000 creditors with roughly $4.7 billion in claims. The bankruptcy plan, confirmed in late 2023, provides for in-kind distributions of liquid crypto assets and equity in a new creditor-owned entity.
Mashinsky separately faces criminal fraud charges from the Department of Justice and SEC civil charges. His trial is scheduled for late 2024. The FTC’s continued pursuit of Celsius executives signals sustained regulatory focus on crypto lending platforms that marketed themselves as banking alternatives without corresponding protections.
Source: Cointelegraph
