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PRESS RELEASE




SEC CHARGES CELSIUS NETWORK LIMITED AND FOUNDER ALEX MASHINSKY WITH FRAUD AND
UNREGISTERED OFFER AND SALE OF SECURITIES


CHARGES INCLUDE THE UNREGISTERED OFFER AND SALE OF CRYPTO ASSET SECURITIES
THROUGH CELSIUS’S LENDING PROGRAM, MAKING FALSE AND MISLEADING STATEMENTS, AND
ENGAGING IN MARKET MANIPULATION

FOR IMMEDIATE RELEASE
2023-133

Washington D.C., July 13, 2023 —

The Securities and Exchange Commission today charged Celsius Network Limited
(Celsius) and its founder and former CEO, Alex Mashinsky, for violating
registration and anti-fraud provisions of the federal securities laws, including
by failing to register the offers and sales of Celsius’s crypto lending product,
the Earn Interest Program; making false and misleading statements to investors
of the Earn Interest Program and Celsius’s own crypto asset security, CEL; and
engaging in market manipulation as it relates to CEL.

Unregistered Offering

According to the SEC’s complaint, from almost the inception of Celsius in 2018
to the point the company effectively halted its platform on June 12, 2022,
Celsius offered to investors the Earn Interest Program, by which investors
tendered their crypto assets to Celsius in exchange for interest payments. As
alleged, although the Earn Interest Program constituted the offer and sale of
securities under the federal securities laws, no registration was filed or in
effect for the offering, and no exemption from registration was available. As a
result, the Earn Interest Program lacked the protection that registration would
offer.

False and Misleading Statements

According to the SEC’s complaint, throughout its operating period, Celsius and
Mashinsky continually misrepresented core aspects of Celsius’s business to Earn
Interest Program and CEL investors, including making false and misleading
statements about trading and business strategies, risks, the company’s business
model, its financial health and success, and the safety of customer assets on
Celsius’s platform.

Market Manipulation

The SEC’s complaint alleges that Celsius and Mashinsky manipulated the market of
CEL. Starting in at least 2020, according to the complaint, Celsius and
Mashinsky engaged in a fraud to artificially increase and support the price of
CEL through manipulative buy backs of CEL far in excess of its publicly
disclosed purchases. As alleged, Celsius and Mashinsky — the single largest
holder of CEL other than Celsius — structured the scheme to have the greatest
impact on the market and induce others to buy CEL, to the benefit of Celsius and
Mashinsky.

“Celsius lied to investors by presenting itself as a safe investment opportunity
and a chance to gain financial freedom, but, behind the scenes, the company
operated a failing business model and took significant risks with investors’
crypto assets,” said Gurbir S. Grewal, Director of the SEC’s Enforcement
Division. “Thousands of retail investors have experienced significant financial
hardship as a result of Celsius’s and Mashinsky’s illegal conduct, and today we
are holding Celsius and Mashinsky responsible for defrauding thousands of retail
investors.”

The SEC’s complaint charges Celsius and Mashinsky with violating the
registration and anti-fraud provisions of the Securities Act of 1933 and the
anti-fraud provisions of the Securities Exchange Act of 1934. The SEC’s
complaint seeks injunctions against future securities law violations and an
injunction that prohibits Mashinsky from participating, directly or indirectly,
in the purchase, offer, or sale of any crypto asset securities or engaging in
activities for the purposes of inducing or attempting to induce the purchase or
sale of any crypto asset securities by others. The complaint also seeks to bar
Mashinsky from acting as an officer or director of a public company and seeks
monetary relief in the form of civil penalties, disgorgement of profits, and
prejudgment interest.

Celsius is cooperating with the SEC and has consented to the relief requested in
the complaint, which includes a permanent injunction against future securities
law violations.

In parallel actions, the U.S. Attorney’s Office for the Southern District of New
York today announced charges against Mashinsky and a non-prosecution agreement
with Celsius, and the Commodity Futures Trading Commission (CFTC) today
announced charges against Celsius and Mashinsky.

The SEC’s ongoing investigation is being conducted by Randall D. Friedland and
Christian J. Ascunce, with the assistance of Sachin Verma, Peter Rosario, and
Adam Gottlieb. The matter is being supervised by Pei Y. Chung and Stacy L.
Bogert, as well as David Hirsch and Jorge G. Tenreiro of the SEC’s Crypto Assets
and Cyber Unit. The litigation is being led by H.B. Roback under the supervision
of James Connor and Olivia Choe.

The SEC appreciates the assistance of the U.S. Attorney’s Office for the
Southern District of New York, the FBI, and the CFTC.

###




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