Celsius Network & Its Former CEO Face SEC Lawsuit

Sahana Kiran
Source – Financial Times

Celsius Network has been making headlines lately. This has been due to its involvement in several lawsuits in the industry. However, in a surprising turn of events, the United States Department of Justice (DOJ) has filed criminal charges against the company over seven counts including securities fraud, commodities fraud, wire fraud, and manipulation of the price of Celsius’ token CEL. Additionally, the Commodity Futures Trading Commission and the Federal Trade Commission also filed lawsuits against Mashinsky and the organization.

On the same day, the SEC filed a lawsuit against Celsius Network and its former CEO, Alex Mashinsky. The lawsuit alleges that both entities were involved in securities fraud. Previously, New York Attorney General Letitia James also filed a separate lawsuit against Mashinsky. She accused him of defrauding investors by making misleading statements about the company’s status to encourage further investments.

Furthermore, the SEC’s lawsuit arrives almost a year after the Celsius Network’s bankruptcy filing, leading some members of the community to criticize the timing as “late.” Mashinsky and Celsius Network have faced scrutiny following the bankruptcy. Additionally, it has been revealed that the Commodity Futures Trading Commission [CFTC] has also accused the former CEO of violating various laws. The CFTC is considering initiating legal proceedings in federal court, with a potential start as early as this month.

Also Read: Former Celsius CEO Accused Of Breaking U.S. Laws Before Collapse

Celsius’ CEL categorized as a ‘security’

The SEC’s lawsuit accused Celsius and Mashinsky of involvement in fraudulent and unregistered sales of “crypto-asset securities,” which led to the generation of billions of dollars. Additionally, the SEC alleges that both entities repeatedly deceived investors by providing misleading information about Celsius’s financial status. Furthermore, they are charged with manipulating the price of CEL, the company’s native token. Many Twitter users acknowledged this development and highlighted that the filing specifically categorized only CEL as a security, not any other coins or tokens.

This development has followed the crypto consortium Fahrenheit’s decision to acquire the assets of the bankrupt crypto lender.

Also Read: Fahrenheit To Acquire Assets of Bankrupt Crypto Lender Celsius