The intersection of traditional banking and crypto has led to significant growth and innovation. Still, this convergence has also exposed businesses and consumers to financial fraud and challenges.

Five crypto companies now figure in some of America’s biggest financial fraud cases. Each of these companies has significantly impacted the crypto market, and their downfall serves as cautionary tales for the sector.

Celsius Network: The Icarus of Crypto Lending

Celsius Network, a crypto lending company, was founded in 2017 by serial entrepreneur Alex Mashinsky, the mind behind Voice over IP (VoIP). The firm’s main offering was a platform allowing users to deposit, earn, borrow, and transfer cryptos.

By 2021, Celsius claimed to have over one million users and $20 billion in assets under management. However, the company’s operations started to show cracks due to regulatory scrutiny, legal challenges, and security breaches.

The situation escalated, severely undermining the company’s credibility.

In July 2022, the Celsius Network filed for bankruptcy following its customers’ and creditors’ massive withdrawal of funds. It revealed a $1.2 billion deficit in its bankruptcy filings, becoming one of the biggest financial frauds in America.