Key Takeaways
- Wintermute was accused of engaging in deceptive practices, including wash trading, since March 2021 to inflate the value of CEL token.
- Reportedly, Celsius executives engaged Wintermute in “improper market making” activities starting March 2021
Wintermute Trading Ltd., one of the leading cryptocurrency market makers, has found itself embroiled in a proposed class-action lawsuit alleging its involvement in fraudulent activities with former Celsius Network Ltd. and its CEO Alex Mashinsky. According to Bloomberg, disgruntled investors who filed the initial lawsuit against Mashinsky and other Celsius executives have amended their complaint to include Wintermute Trading Ltd.
The London-based crypto market maker is accused of engaging in deceptive practices, including wash trading, since as early as March 2021, with the aim of inflating the value of Celsius Network’s CEL token and other loan products. In wash trading, the same party effectively acts as both the buyer and the seller, giving the appearance of market demand and artificially inflating trading volumes or prices.
In the amended complaint, lawyers representing the investors claim that Wintermute’s trading activities manipulated the price of the CEL token and falsified the reported trading volume on the crypto lending platform. Furthermore, they allege that Wintermute colluded with the lending platform to carry out a strategic scheme aimed at deceiving Celsius Network’s investors.
The complaint also accuses Wintermute of playing a significant role in an unsuccessful attempt by Mashinsky to artificially boost the CEL token’s value in May 2022 following the collapse of Terra. The plaintiffs, who initially sued Mashinsky and other Celsius executives in July 2022, expanded their federal lawsuit in New Jersey to include Wintermute as a defendant, implicating another major player in the cryptocurrency industry in the aftermath of Celsius Network’s bankruptcy.
Allegedly, Celsius executives engaged Wintermute in “improper market making” activities from around March 2021 till Celsius froze withdrawals in June last year. New Jersey-based Celsius filed for U.S. bankruptcy in July last year after freezing customer withdrawals. At the time, Celsius claimed it had anywhere between $1 billion and $10 billion in assets and liabilities and over 100,000 creditors.
