It has been reported that the Commodity Futures Trading Commission (CFTC) conducted an investigation and found that Celsius Network, a bankrupt crypto lender, and its former CEO, Alex Mashinsky, violated US laws before the company’s collapse in the previous year.
CFTC discovered Celsius deceived investors
Bloomberg states that the CFTC’s enforcement unit attorneys discovered that Celsius deceived investors and did not register with the regulatory body, and they also asserted that Mashinsky violated regulations.
According to sources familiar with the situation, there are reports that the CFTC may take legal action against the company as early as this month, pending agreement from the majority of the agency’s commissioners on the investigators’ conclusions.
It has been revealed through bankruptcy filings that Celsius is also under investigation by the SEC and the U.S. Attorney’s Office for the Southern District of New York.
Legal action is currently being taken against Mashinsky, as he faces a lawsuit filed by New York Attorney General Letitia James.
The lawsuit aims to prohibit the Celsius co-founder from conducting business and demands that he pay damages.
According to James, Mashinsky made false statements about the safety of the lending platform and concealed the company’s weakening financial state. Additionally, James accuses Mashinsky of defrauding hundreds of thousands of investors, including over 26,000 individuals from New York, of billions of dollars.
James said this following the filing of the suit in January:
“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin. The law is clear that making false and unsubstantiated promises and misleading investors is illegal.”
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.
Stay tuned for more details about the issue.
