Celsius creditors accuse Wintermute of facilitating laundering trading
Date: 2023-06-25 Author: Karina Ziganova Categories: BUSINESS
This week, creditors amended the lawsuit against the bankrupt company Celsius. The new accusations allege that platform executives have recruited market maker Wintermute to engage in laundering trading of the CEL token.
Wintermute Trading is a market maker specializing in high-frequency algorithmic trading and market creation services that operate both on the exchanges themselves and on the OTC market. According to Crunchbase, from 2018 to 2021, Pantera Capital, Kenetec, Lightspeed Venture Partners, and Blockchaincom Ventures invested in Wintermute from 2018 to 2021. The last 2 funds work in conjunction and are actually affiliated, that is, they belong to the same founders.
Wintermute Trading is a market maker specializing in high-frequency algorithmic trading and market creation services that operate both on the exchanges themselves and on the OTC market. According to Crunchbase, from 2018 to 2021, Pantera Capital, Kenetec, Lightspeed Venture Partners, and Blockchaincom Ventures invested in Wintermute from 2018 to 2021. The last 2 funds work in conjunction and are actually affiliated, that is, they belong to the same founders.
Recall that after the collapse of Celsius last year, several senior executives were accused of fraud. So, the co-founder of the company, Alex Mashinsky, is on trial by the Attorney General of New York for defrauding investors.
Wintermute helped Celsius manipulate the price of CEL
Central to the accusations is the allegation that the company's executives resorted to fraudulent tactics to prop up the price of CEL. The lawsuit alleges that they used users' deposits to purchase tokens and increase their net position.
The plaintiffs also state that from March 2021 to June 2022, Celsius actively engaged Wintermute to engage in improper market creation using laundering trading – buying and selling cryptocurrency in order to create the appearance of large trading volumes and, in turn, increase interest in the asset.
The exact role of Wintermute in providing liquidity to Celsius is still unclear, however, there was certainly a large amount of cryptocurrency flowing between the two entities. This happened both before and after the latter filed for bankruptcy.
In October 2022, a Twitter user Mikeburgersburg identified a number of transactions involving Celsius and Wintermute. On the eve of bankruptcy, the crypto lender transferred about $160 million in bitcoins (BTC) to third-party wallets. Among them were several addresses supposedly controlled by Wintermute.
In May of this year, Arkham Intelligence reported that Celsius had also transferred about $20 million in wrapped Ethereum (WETH) to the market maker's wallet. Wintermute, in turn, denies all wrongdoing.
