Crypto Biz: Was Celsius just a Ponzi after all?

cointelegraph.com:

Crypto lender Celsius was one of the biggest casualties of the bear market. After halting withdrawals for months due to “extreme market conditions,” the distressed lender officially filed for Chapter 11 bankruptcy on July 13. Now, the federal judge overseeing the bankruptcy proceedings has ordered the case examiner to determine whether the company was operating like a Ponzi scheme. Disgruntled Celsius customers have made a strong case that the company’s business operations met the legal definition of a Ponzi. After all, it didn’t take long for Celsius’ business model to crumble under volatility. This is one case we should all be monitoring very closely. 

In this week’s Crypto Biz, we once again revisit the Celsius debacle. We also explore Binance’s investment in Elon Musk’s Twitter deal and MicroStrategy’s renewed commitment to Bitcoin.

In finance, a Ponzi scheme is a fraudulent investment practice where returns are generated and paid out to existing investors using money from later investors. Allegations of Ponzi have now been levied at Celsius by its former customers, who say the firm used the assets of new users to pay yields and facilitate withdrawals of existing users. These allegations are being taken seriously by federal judge Martin Glenn, who ordered the case examiner and committee of Celsius creditors to probe the matter closely. Glenn was quoted as saying he was “shocked” when he saw redactions made by Celsius related to an Oct. 11 motion that outlines employee bonuses. This one could get explosive.

Crypto exchange Binance was one of several firms to help finance Elon Musk’s $44 billion acquisition of Twitter. Binance doled out $500 million to help fund the initiative, with CEO Changpeng “CZ” Zhao touting