Investigators from the Commodity Futures Trading Commission (CFTC) have reportedly determined that bankrupt crypto lender Celsius and its former CEO Alex Mashinsky broke several United States regulations before the company’s implosion in 2022.
According to a July 5 report from Bloomberg citing people familiar with the matter, attorneys from the CFTC’s enforcement division found that Celsius misled investors, failed to register with the regulator and Mashinsky broke several regulations.
If the majority of the CFTC commissioners agree with the investigators’ findings, the agency could file a case against the collapsed crypto lender in U.S. federal court as early as this month, according to the sources.
The CFTC investigators’ findings add to a growing stack of regulatory actions against the now-defunct crypto lending platform. The New York Attorney General sued Mashinsky on Jan. 5, alleging that the former CEO misled investors and caused billions of dollars in losses.
I'm suing the former CEO of cryptocurrency platform @CelsiusNetwork for defrauding investors out of billions of dollars.
— NY AG James (@NewYorkStateAG) January 5, 2023
Alex Mashinsky lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York.
Related: Celsius Network approved to convert altcoins into BTC or ETH
On June 16, 2022, securities regulators from five different U.S. states opened an investigation into Celsius three days after the firm abruptly halted user withdrawals on June 13.
The Securities and Exchange Commission, along with federal prosecutors from Manhattan, also launched a series of probes into the firm, according to court filings. Bloomberg notes that both the SEC and representatives from the U.S. Attorney’s Office for the Southern District of New York have declined to comment on the status of the investigations.
Cointelegraph contacted the CFTC and Alex Mashinsky but did not receive a response.
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