SNEAK PEEK
- Wintermute faces lawsuit for alleged involvement in Celsius’s fraud.
- Wash trading accusations intensify fallout from Celsius’s collapse.
- Wintermute remains resilient amidst crypto market turmoil.
Amidst an already turbulent crypto landscape, London-based Wintermute Trading Ltd., one of the foremost players in the cryptocurrency market, now faces a class-action lawsuit. The suit claims Wintermute abetted former Celsius Network Ltd. CEO Alex Mashinsky in a deceptive scheme defrauding his firm’s investors.
One of the biggest crypto market makers was accused in a proposed class-action lawsuit of helping former Celsius CEO Alex Mashinsky dupe investors https://t.co/fAOrmVGioB
— Bloomberg (@business) June 23, 2023
As per the news, last July, Mashinsky and other executives from the now-defunct Celsius Network were scrutinized as plaintiffs brought forth allegations. The suit leveled accusations of ‘wash trading,’ an illegal practice creating false impressions of high-frequency trading and other improper conduct. This week, the plaintiffs broadened the scope of their case to include Wintermute as a defendant, intensifying the fallout from Celsius’s bankruptcy.
Based on reports, the alleged wash trading started in March 2021, with Wintermute purportedly inflating the value of CEL, Celsius’s native token, and its loan products. The complaint also contends that Wintermute was instrumental in Mashinsky’s futile bid to stabilize CEL following the crash of Terra and Luna tokens in May 2022.
However, the plaintiff’s lawyers argued that the deceptive trading strategies corrupted both the CEL token prices and the reported trading volume, fooling investors strategically. They pointed to the freezing of all Celsius accounts on June 13, 2022, and the subsequent bankruptcy filing amidst a $2 trillion market crash as evidence of this misconduct.
On the other hand, Wintermute, renowned for a $1.5 trillion trading volume and revenue of $1.05 billion in 2021’s bull market, also encountered its share of trouble. It had about $55 million in exposed assets on FTX, Sam Bankman-Fried’s collapsed crypto exchange, and suffered a $160 million hack in its decentralized finance operations.
Despite these setbacks, Wintermute’s CEO, Evgeny Gaevoy, declared his firm’s intentions to seize more market share. As other US trading firms retreat from the crypto industry, Wintermute emerges as a resilient contender. Further, Gaevoy proudly states that his company had not scaled down or laid off any employees.
However, the discovery of Wintermute’s alleged role in Mashinsky’s purported wash-trading has cast a shadow on the firm’s aspirations. This accusation emerged from an investigation into Celsius before its bankruptcy filing. The plaintiffs assert that a reasonable investor would deem it crucial to know of any manipulative trading involving CEL tokens. They also noted the importance of reported trading volumes reflecting genuine market demand.
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- Source: https://investorbites.com/wintermute-dragged-into-celsius-debacle-wash-trading-scandal/
