Bankrupt crypto lender Celsius misused investor and customer funds for years before its collapse, including to help its founders cash out tens of millions of dollars, a court-appointed examiner said in a new report. The company founded by Alex Mashinsky promoted itself as an innovative, digital asset alternative to traditional banks, luring customers with interest rates as high as 17 per cent. But it used the money it received from thousands of everyday investors to inflate the price of its own token, CEL, in a scheme an employee described at the time as “very Ponzi like”, according to the report prepared by a law firm appointed by the US bankruptcy court.

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BlockFi has filed for Chapter 11 bankruptcy, making the crypto lender backed by Peter Thiel’s venture capital firm the latest casualty of the fallout from the collapse of Sam Bankman-Fried’s FTX exchange.
The filing marks an unravelling several months in the making for New Jersey-based BlockFi, led by chief executive Zac Prince, which was valued at $4bn in a fundraising round last year. In July, it suffered losses on loans to the collapsed crypto hedge fund Three Arrows Capital, leading to a bailout this summer from Bankman-Fried. But FTX itself collapsed earlier this month, prompting BlockFi to pause lending and customer withdrawals.
Now the lender is the latest once high-flying crypto company to come crashing to earth as the collapse of Bankman-Fried’s crypto empire sends ripples through the digital assets industry.

Read more: https://www.ft.com/content/36a6ec4e-15f8-4b15-8bfa-076b87004264