Actually, there have been two Celcius Lawsuit in recent times, and of course, both of these cases had to do with two different companies, so we aren’t pretty sure which company you’re searching for. But to solve that issue, we’re here to talk about both of these big cases, so you can get information about whichever lawsuit you’re looking for. Here we go.
Celsius Holdings, Inc. Investor Lawsuit (2024-2025)
Let’s first talk about the very recent one, so, just back in 2024, the company was the subject of a class action investor lawsuit, with the Rosen Law Firm leading the charge.
And just in case you don’t know anything about this case yet, well, the main allegations were that Celsius provided false information to its investors regarding its sales and future growth. As per the details that became public, see, from February 29 to September 4, 2024, Celsius is claimed to have shipped more products to PepsiCo than what would be justified by actual customer demand.
Well, if you just looked at the numbers, it would appear like the sales were growing super fast, but in actuality, PepsiCo ended up with surplus stock. When Pepsi later cut down its orders, Celsius was thrown off the revenue track to what the lawsuit defines as a “sales cliff”, you know, that right there was a sudden and significant drop in revenue.
The main concern of shareholders is that this risk wasn’t even disclosed to them with proper documentation or anything like that. So, since the matter has reached to the court already, right now, it is being tried in the Southern District of Florida.
The lead plaintiff nomination deadline was set for early 2025, and although the case is still happening, Celsius Holdings is presently dealing with the issue of bringing back the trust of the investors and it looks like they’re keeping up the work.
Crypto Collapse and Criminal Charges (2017-2025)
And now’s the time to talk about the Celsius Network, which might be the legal issue you’re searching for. Since we weren’t totally sure, here we’re with the details of this one. And as you can already read in the heading/title itself, it has a lot to do with the Crypto collapse and there were some criminal charges brought against the company as well.
How it all happened though?
Before that, just know the facts like Celsius Network was established in 2017 and promoted its services as the banking of the future. Since at that time the whole crypto thing was on a boom and growing like crazy, no doubt, clients were super intrigued and were able to make deposits of their cryptocurrencies such as Bitcoin or Ethereum, receive interest and take out loans using crypto as collateral. This platform kept on growing and so much so that by the end of the second quarter of 2022, the entity had over 1.7 million users and more than $12 billion in assets under management.
Though things actually went downhill right after that.
That was when a lot of people/users began to be suspicious of the company itself, like in June 2022, Celsius abruptly stopped all withdrawals, blaming “extreme market conditions” for the move. And just a month after, the company declared bankruptcy and disclosed a deficit of $1.2 billion. Back then, total liabilities amounted to almost $5.5 billion, almost entirely obligations to regular users.
So no doubt, when all of this was going on, officials had to look into it, and sure enough, that’s when this entire legal matter started. And then, just the next year, in a landmark deal with the FTC in 2023, Celsius agreed to pay a fine of $4.7 billion. That pretty much was one of the most significant settlements of the agency’s history itself.
