A report from Bloomberg News states that the Commodity Futures Trading Commission investigators have determined that Celsius Network, a bankrupt cryptocurrency lender, and its former CEO violated US regulations before the company’s downfall.

Taking action against Celsius

According to insiders, the regulatory body may take legal action against Celsius in federal court in the coming weeks if the majority of its commissioners concur with the assessment.

The CFTC’s legal experts determined that Celsius provided investors with misleading information and should have been registered with the regulator. Additionally, former CEO Alex Mashinsky is alleged to have violated regulations. This information was reported by Bloomberg.

The CFTC did not immediately respond to a request for comment from The Block.

About a year ago, the company declared bankruptcy after owing billions of dollars to investors. According to a bankruptcy examiner’s report ordered by the court, Celsius engaged in dangerous investment practices with customer funds and concealed the extent of its market-making activities for its native token.

The report also accused the former CEO, Mashinsky, of selling the native token, CEL, while falsely claiming to either hold or purchase more.

New York Attorney General Letitia James sued Mashinsky for defrauding investors, including more than 26,000 New Yorkers, out of billions of dollars in crypto, earlier this year.

Back in May, 2ew revealed the fact that the former Celsius Network founder Alex Mashinsky asked the courts to dismiss the New York State complaint against him.

Just in case you don’t know, these allege the fact that he defrauded investors out of billions of dollars.

The new filing with the New York Supreme Court states that Mashinsky argues the fact that the complaint should be tossed out because it relies on misinformation and other issues.

The motion stated the following:

“The Complaint, which parrots misinformation online about Mashinsky and Celsius Network, LLC (“Celsius”) and borrows others’ baseless conclusions, demonstrates a fundamental misunderstanding of Celsius’s business, and Mashinsky’s role therein.”

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