Did Celsius use client's BTC and ETH to pump the CEL token? The short answer is, evidence strongly suggests that happened, contributing significantly to the company's downfall and eventual bankruptcy. Former Celsius CEO Mashinsky sentenced to 12 years for crypto fraud underscores the severity of the situation. He misled investors about Celsius’s financial health and risks, and investigations revealed questionable practices, including the alleged manipulation of the CEL token's price.

One of the key allegations against Celsius is that they Used customer funds to pump CEL. This involved using Bitcoin (BTC) and Ethereum (ETH) deposited by users to artificially inflate the price of their native CEL token. Celsius did not earn sufficient yield on its crypto asset deployments to fully fund its CEL buybacks. As a result, it began using customer-deposited Bitcoin (BTC) and...

This practice is highly problematic because it diverts user funds from their intended purpose – earning yield – to prop up the value of a token which benefited Celsius executives and insiders. It also created a false sense of security and stability for investors, masking the underlying financial vulnerabilities of the platform.

Throughout 20, Celsius borrowed using deposited Bitcoin and Ether as collateral. This created a precarious situation. When the crypto market began to decline, and especially When the Luna foundation imploded and the market collapsed, Celsius' risky borrowing strategies and the artificial inflation of the CEL token left them exposed to massive losses. The use of client's BTC and ETH to support the CEL token left them with little wiggle room to cover their loans, ultimately leading to the company's collapse and significant losses for its users.

The sentencing of Mashinsky highlights the consequences of misusing customer funds and manipulating market conditions within the crypto space. The Celsius case serves as a stark warning about the importance of transparency and sound financial management in the industry.