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

Sahana Kiran
Source – Financial Times

Prominent crypto lender Celsius failed its users in 2022. Now, it is facing heat from the Commodity Futures Trading Commission [CFTC] yet again. At press time, Celsius and its former CEO Alex Mashinsky have been accused of breaking several U.S. laws. This was prior to the firm’s collapse.

According to a Bloomberg report, the CFTC has determined that Celsius engaged in misleading practices toward investors. Furthermore, the report noted that Celsius intentionally chose not to register with the regulatory authority as required. Additionally, Mashinsky has been charged with violation of several regulations. If a majority of the agency’s commissioners concur with the conclusion, the CFTC may initiate legal proceedings in federal court. This could be done as early as this month.

Also Read: Celsius: ‘Eligible Users’ Are Now Allowed To Withdraw Funds

CFTC joins SEC and New York Attorney General in taking down Celsius

On June 16, 2022, securities regulators from five different U.S. states initiated an investigation into Celsius. This development took place three days after the sudden suspension of user withdrawals on June 13, 2022. Additionally, the Securities and Exchange Commission [SEC] and federal prosecutors from Manhattan commenced a series of investigations into the firm.

This wasn’t all. The New York Attorney General filed a lawsuit against the former CEO of the crypto lending firm. In January 2023, Mashinsky was accused of deceiving investors. He was also perceived to be responsible for significant financial losses amounting to billions of dollars.

Furthermore, the court-appointed bankruptcy examiner leveled accusations against the former CEO as well. He was alleged to have sold the native token, CEL, while misleading the public by claiming to either buy more or retain CEL tokens.

Also Read: Cryptocurrency Lender Celsius Didn’t Record ~7000 Transfers Worth Billions