Celsius and its former CEO, Alex Mashinsky, face massive allegations of violating US regulations, investigators from the Commodity Futures Trading Commission (CFTC) have revealed.
The CFTC’s enforcement division reportedly determined, after a thorough examination, that Celsius engaged in deceptive practices, neglected to register with the regulator, and that Machinsky himself violated numerous regulations, people familiar with the matter said in a new report. Bloomberg report.
The findings of the investigation, if supported by a majority of the CFTC’s commissioners, could lead to action against the defunct cryptocurrency lender in US federal court as early as this month, according to people familiar with the matter.
The potential legal action marks a major step in holding Celsius and its former senior boss accountable for their alleged wrongdoing, and highlights regulatory challenges in the cryptocurrency industry.
Celsius and CEO Amy on the CFTC’s decision
After the implosion of a cryptocurrency lender On July 13, 2022the CFTC and the Securities and Exchange Commission (CFTC) and the SEC wasted no time in launching separate investigations into the company’s business practices.
Celsius founder Alex Mashinsky allegedly violated US rules, CFTC investigators say. If proven, the CFTC may take legal action in federal court. # Celsius #CFTC # encrypt
– Block Savvy (Block_Savvy) July 6, 2023
After an extensive investigation, the CFTC investigation has reached its conclusion, revealing that both Celsius and Mashinsky engaged in practices that misled investors and ignored existing regulations, Bloomberg reported.
Celsius chose not to issue an official statement on the matter, leaving questions unanswered. Similarly, insiders within the organization declined to identify specific regulations that the company and Mashinsky had explicitly violated, aside from not registering with the appropriate authorities.
BCH market cap currently at $5.8 billion. Chart: TradingView.com
Mounting regulatory challenges
Recent findings from the CFTC’s investigation have intensified regulatory scrutiny surrounding the now-defunct cryptocurrency lending platform, Celsius.
This development comes on the heels of the New York Attorney General’s lawsuit against Mashinsky on January 5thasserting that he misled investors, which ultimately led to billions of dollars in losses.
Mashinsky strongly refuted the allegations made by NYAG, stating that there was a fundamental misunderstanding of both Celsius’s business model and his role as CEO. However, mounting legal challenges against him paint a troubling picture of the embattled CEO.
If the case goes to federal court, it would be another addition to the CFTC’s vast portfolio of more than 85 cases involving digital assets.
CFTC Director Rustin Behnam told Bloomberg that the agency is already responsible for imposing penalties and facilitating refunds of more than $4 billion in cases involving fraudulent cryptocurrency trading.
Featured image from Protos
