Federal Trade Commission v. Celsius Network Inc. et al
| Federal Trade Commission |
| Celsius Network Inc., Celsius Network LLC, Celsius Networks Lending LLC, Celsius Lending LLC, Celsius KeyFi LLC, Celsius Mining LLC, Celsius US Holding LLC, Celsius US LLC, Celsius Management Corp., Alexander Mashinsky, Shlomi Daniel Leon, Hanoch Goldstein and Hanoch "Nuke" Goldstein |
| 1:2023cv06009 |
| July 13, 2023 |
| US District Court for the Southern District of New York |
| Denise L Cote |
| Other Statutory Actions |
| 15 U.S.C. § 45 Federal Trade Commission Act (unfair or deceptive acts) |
| None |
Docket Report
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Filing 30
NOTICE OF APPEARANCE by Maya Jumper on behalf of Shlomi Daniel Leon..(Jumper, Maya)
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Filing 29
NOTICE OF APPEARANCE by Allison Michele Wuertz on behalf of Shlomi Daniel Leon..(Wuertz, Allison)
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Filing 28
NOTICE OF APPEARANCE by William Michael Regan on behalf of Shlomi Daniel Leon..(Regan, William)
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Filing 27
STIPULATED ORDER FOR PERMANENT INJUNCTION, MONETARY JUDGMENT AND OTHER RELIEF AGAINST CELSIUS NETWORK INC., CELSIUS NETWORK LLC, CELSIUS NETWORKS LENDING LLC, CELSIUS LENDING LLC, CELSIUS KEYFI LLC, CELSIUS MINING LLC, CELSIUS US HOLDING LLC, CELSIUS US LLC, and CELSIUS MANAGEMENT CORP.: THEREFORE, IT IS ORDERED as follows: 1. This Court has jurisdiction over this matter. 2. The Complaint charges that Defendants participated in deceptive and unfair acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. 45, in the marketing and sale of cryptocurrency lending and custody services. The Complaint further charges that Defendants obtained customer information of a financial institution relating to another person by making false, fictitious, or fraudulent statements, in violation of Section 521 of the GLB Act, 15 U.S.C. 6821. 3. Only for purposes of this action, Corporate Defendants admit the facts necessary to establish jurisdiction and as otherwise specifically stated in this Order. Corporate Defendants further admit the facts set forth on pages 107-109 of the Debtors' Disclosure Statement filed on June 27, 2023 in the Bankruptcy Case, Dkt. 2902. 4. Corporate Defendants waive any claim that they may have under the Equal Access to Justice Act, 28 U.S.C. 2412, concerning the prosecution of this action through the date of this Order, and agree to bear their own costs and attorney fees. 5. Corporate Defendants and the Commission waive all rights to appeal or otherwise challenge or contest the validity of this Order. 6. Entry of this Order is in the public interest. 7. The Commission's prosecution of this action, including entry of a money judgment and the enforcement of a judgment (other than a money judgment) obtained in this action are actions to enforce the Commission's police or regulatory powers. As a result, if the Debtor Defendants' bankruptcies are pending as of the date of entry of this Order, these actions are excepted from the automatic stay pursuant to 11 U.S.C. 362(b)(4). IT IS ORDERED that Corporate Defendants are permanently restrained and enjoined from advertising, marketing, promoting, offering, or distributing, or assisting in the advertising, marketing, promoting, offering, or distributing of any product or service that can be used to deposit, exchange, invest, or withdraw assets, whether directly or through an intermediary. IT IS FURTHER ORDERED that Corporate Defendants, Corporate Defendants' officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with promoting or offering for sale any product or service are permanently restrained and enjoined from misrepresenting or assisting others in misrepresenting, expressly or by implication, as further set forth herein. IT IS FURTHER ORDERED that Corporate Defendants and Corporate Defendants' officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly are hereby permanently restrained and enjoined from, as further set forth herein. IT IS FURTHER ORDERED that Corporate Defendants, Corporate Defendants' officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are permanently restrained and enjoined from disclosing to any other person any Nonpublic Personal Information about a consumer unless Corporate Defendants have obtained the consumer's Express Informed Consent to disclose that Nonpublic Personal Information to that person. IT IS FURTHER ORDERED that this Order does not restrain or enjoin the deposit, exchange, distribution, investment, or withdrawal of assets owned or held by the Debtor Defendants and being administered in accordance with the United States Bankruptcy Code and orders of the court in the Bankruptcy Case. For the avoidance of doubt, Part VI.C-D, below, does not create a contingent liability against the Debtor Defendants and does not preclude the full distribution of assets held by the Debtor Defendants in the Bankruptcy Case. IT IS FURTHER ORDERED that: Judgment in the amount of $4,720,000,000 is entered in favor of the Commission against Corporate Defendants, jointly and severally, as monetary relief. The liability of Corporate Defendants shall be joint and several with any other Defendants to the extent subsequently ordered. The judgment is suspended as to Corporate Defendants subject to the subsections below. The suspension of the judgment as to the Non-Debtor Defendants is expressly premised upon the truthfulness, accuracy, and completeness of, as further set forth herein. IT IS FURTHER ORDERED that: Corporate Defendants relinquish dominion and all legal and equitable right, title, and interest in all assets transferred pursuant to this Order and may not seek the return of any assets. The facts alleged in the Complaint will be taken as true, without further proof, in any subsequent civil litigation by or on behalf of the Commission, including in a proceeding to enforce its rights to any payment or monetary judgment pursuant to this Order, such as a nondischargeability complaint in any bankruptcy case. The facts alleged in the Complaint establish all elements necessary to sustain an action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes, as further set forth herein. All money received by the Commission pursuant to this Order may be deposited into a fund administered by the Commission or its designee to be used for consumer relief, such as redress and any attendant expenses for the administration of any redress fund. If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after such redress is completed, the Commission may apply any remaining money for such related relief (including consumer information remedies) as it determines to be reasonably related to Corporate Defendants' practices alleged in the Complaint. Any money not used for relief is to be deposited to the U.S. Treasury. Corporate Defendants have no right to challenge any actions the Commission or its representatives may take pursuant to this Subsection. The Debtor Defendants agree that the monetary judgment ordered by Section VI.A is not dischargeable in the Bankruptcy Case. he Debtor Defendants will not object to allowance of the FTC claim in the Bankruptcy Case as a general unsecured claim in the amount of $4,720,000,000, AS FURTHER SET FORTH IN THIS ORDER. IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. SO ORDERED this 16th day of August, 2023. Celsius Management Corp. (a limited liability company), Celsius Mining LLC (a limited liability company), Celsius Network Inc. (a corporation), Celsius Network LLC (a limited liability company), Celsius Networks Lending LLC (a limited liability company), Celsius US Holding LLC (a limited liability company), Celsius US LLC (a limited liability company), Celsius KeyFi LLC (a limited liability company) and Celsius Lending LLC terminated., Motions terminated: #26 JOINT LETTER MOTION for Leave to File Stipulated Order addressed to Judge Denise L. Cote from Federal Trade Commission and Corporate Defendants dated August 15, 2023 filed by Federal Trade Commission. (Signed by Judge Denise L. Cote on 8/16/2023) (vfr) Transmission to Finance Unit (Cashiers) for processing.
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Filing 26
JOINT LETTER MOTION for Leave to File Stipulated Order addressed to Judge Denise L. Cote from Federal Trade Commission and Corporate Defendants dated August 15, 2023. Document filed by Federal Trade Commission. (Attachments: #1 Proposed Order Exhibit A - Stipulated Order, #2 Exhibit Exhibit B - Bankruptcy Court Order).(Aizpuru, Katherine)
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Filing 25
WAIVER OF SERVICE RETURNED EXECUTED. Hanoch "Nuke" Goldstein waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 24
WAIVER OF SERVICE RETURNED EXECUTED. Alexander Mashinsky waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 23
AFFIDAVIT OF SERVICE of Notice of Initial Pretrial Conference and Judge Cote's Individual Practices served on Alexander Mashinsky, S. Daniel Leon, Hanoch Goldstein on 7/24/23. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 22
NOTICE OF APPEARANCE by Richard Hale Cunningham, I on behalf of Celsius KeyFi LLC, Celsius Lending LLC, Celsius Management Corp., Celsius Mining LLC, Celsius Network Inc., Celsius Network LLC, Celsius Networks Lending LLC, Celsius US Holding LLC, Celsius US LLC..(Cunningham, Richard)
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Filing 21
NOTICE OF INITIAL PRETRIAL CONFERENCE: Initial Conference set for 9/29/2023 at 11:00 AM in Courtroom 18B, 500 Pearl Street, New York, NY 10007 before Judge Denise L. Cote. (Signed by Judge Denise L. Cote on 7/21/2023) (vfr)
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Filing 20
ORDER granting #19 Motion for Richard Cunningham to Appear Pro Hac Vice (HEREBY ORDERED by Judge Denise L. Cote)(Text Only Order) (jwh)
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>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #19 MOTION for Richard Cunningham to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-28031305. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (sgz)
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Filing 19
MOTION for Richard Cunningham to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-28031305. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Celsius KeyFi LLC, Celsius Lending LLC, Celsius Management Corp., Celsius Mining LLC, Celsius Network Inc., Celsius Network LLC, Celsius Networks Lending LLC, Celsius US Holding LLC, Celsius US LLC. (Attachments: #1 Affidavit of Rich Cunningham in Support, #2 Exhibit A - Certificate of Good Standing (CO), #3 Exhibit B - Certificate of Good Standing (DC), #4 Text of Proposed Order Proposed Order).(Cunningham, Richard)
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Filing 18
ORDER STAYING ACTION AS TO CORPORATE DEFENDANTS FOR 45 DAYS granting #3 Letter Motion to Stay re: #3 JOINT MOTION to Stay as to Corporate Defendants. It is hereby ORDERED that: 1. The motion is GRANTED. 2. The above-captioned action is stayed as to Corporate Defendants until August 28, 2023 or until the Bankruptcy Court approves the Stipulated Order, whichever is earlier. 3. On or before August 28, 2023, the FTC and the Corporate Defendants shall file a motion seeking entry of the Stipulated Order or otherwise notify the Court of the status of the effort to seek Bankruptcy Court approval.. (Signed by Judge Denise L. Cote on 7/20/2023) (vfr)
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Filing 17
NOTICE OF APPEARANCE by Robert Allen on behalf of Celsius KeyFi LLC, Celsius Lending LLC, Celsius Management Corp., Celsius Mining LLC, Celsius Network Inc., Celsius Network LLC, Celsius Networks Lending LLC, Celsius US Holding LLC, Celsius US LLC..(Allen, Robert)
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Filing 16
NOTICE OF APPEARANCE by Christopher Stanley Koenig on behalf of Celsius KeyFi LLC, Celsius Lending LLC, Celsius Management Corp., Celsius Mining LLC, Celsius Network Inc., Celsius Network LLC, Celsius Networks Lending LLC, Celsius US Holding LLC, Celsius US LLC..(Koenig, Christopher)
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Filing 15
ORDER granting #4 Motion for Katherine M. Worthman to Appear Pro Hac Vice (HEREBY ORDERED by Judge Denise L. Cote)(Text Only Order) (jwh)
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Filing 14
WAIVER OF SERVICE RETURNED EXECUTED. Celsius US Holding LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 13
WAIVER OF SERVICE RETURNED EXECUTED. Celsius US LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 12
WAIVER OF SERVICE RETURNED EXECUTED. Celsius Networks Lending LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 11
WAIVER OF SERVICE RETURNED EXECUTED. Celsius Network Inc. waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 10
WAIVER OF SERVICE RETURNED EXECUTED. Celsius Network LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 9
WAIVER OF SERVICE RETURNED EXECUTED. Celsius Management Corp. waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 8
WAIVER OF SERVICE RETURNED EXECUTED. Celsius Mining LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 7
WAIVER OF SERVICE RETURNED EXECUTED. Celsius Lending LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 6
WAIVER OF SERVICE RETURNED EXECUTED. Celsius KeyFi LLC waiver sent on 7/13/2023, answer due 9/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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Filing 5
WAIVER OF SERVICE RETURNED EXECUTED. Shlomi Daniel Leon waiver sent on 7/13/2023, answer due 10/11/2023. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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***NOTICE TO ATTORNEY REGARDING PARTY MODIFICATION. Notice to attorney Katherine Marie Aizpuru. The party information for the following party/parties has been modified: Celsius Network Inc.; Celsius Network LLC; Celsius Networks Lending LLC; Celsius Lending LLC; Celsius KeyFi LLC; Celsius Mining LLC; Celsius US Holding LLC; Celsius US LLC; Celsius Management Corp.; Alexander Mashinsky; Shlomi Daniel Leon; Hanoch Goldstein. The information for the party/parties has been modified for the following reason/reasons: party name contained a typographical error; party text was omitted;. (jgo)
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***NOTICE TO ATTORNEY REGARDING DEFICIENT PLEADING. Notice to Attorney Katherine Marie Aizpuru re: Document No. #1 Complaint. The filing is deficient for the following reason(s): all of the parties listed on the pleading were not entered on CM ECF; add Alexander Mashinsky, Shlomi Daniel Leon, and, Hanoch "Nuke" Goldstein, each individually. Docket the event type Add Party to Pleading found under the event list Complaints and Other Initiating Documents... (jgo)
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CASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Denise L. Cote. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(jgo)
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***NOTICE TO ATTORNEY REGARDING CIVIL CASE OPENING STATISTICAL ERROR CORRECTION: Notice to attorney Katherine Marie Aizpuru. The following case opening statistical information was erroneously selected/entered: Dollar Demand $9,999,000;. The following correction(s) have been made to your case entry: the Dollar Demand has been modified to none;. (jgo)
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Magistrate Judge Katharine H. Parker is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (jgo)
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Case Designated ECF. (jgo)
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Filing 4
MOTION for Katherine M. Worthman to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Federal Trade Commission. (Attachments: #1 Affidavit Affidavit in Support of Motion, #2 Exhibit Certificate of Good Standing, #3 Text of Proposed Order Proposed Order).(Worthman, Katherine)
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Filing 3
JOINT MOTION to Stay as to Corporate Defendants. Document filed by Federal Trade Commission. (Attachments: #1 Exhibit Exhibit A - Stipulated Order, #2 Text of Proposed Order Proposed Order).(Aizpuru, Katherine)
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Filing 2
CIVIL COVER SHEET filed..(Aizpuru, Katherine)
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Filing 1
COMPLAINT against Celsius KeyFi LLC, Celsius Lending LLC, Celsius Management Corp., Celsius Mining LLC, Celsius Network Inc., Celsius Network LLC, Celsius Networks Lending LLC, Celsius US Holding LLC, Celsius US LLC, Hanoch Goldstein, Shlomi Daniel Leon, Alexander Mashinsky. Document filed by Federal Trade Commission..(Aizpuru, Katherine)
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>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #4 MOTION for Katherine M. Worthman to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (dsh)
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