A new decision has been made in the process carried out in the USA against Alexander Mashinsky, the founder and former CEO of the bankrupt crypto lending platform Celsius. The U.S. Commodity Futures Trading Commission permanently barred Mashinsky from registering with the agency and participating in commodity activities the agency oversees.
CFTC file resulted in court approval
According to a statement released Thursday, the decision was entered into the records of the U.S. District Court for the Southern District of New York and received judge approval the same day. Thus, the long-running CFTC case was completed with a formal prohibition of action for Mashinsky.
The CFTC has not announced a new fine at this stage. However, the institution activated the registration and transaction ban, stating that Mashinsky, who had previously pleaded guilty to fraud charges, misled the public about the financial situation of Celsius and the security of its activities.
It was stated that Mashinsky and Celsius deceived hundreds of thousands of customers with false statements about the platform’s security, profitability and compliance with regulations.
First came the prison sentence, then the permanent ban
Mashinsky was previously sentenced to 12 years in prison as part of the criminal case. In the same case, he was fined 50 thousand dollars and ordered to pay back 48 million dollars. In addition to these sanctions, the latest CFTC decision is an administrative step that completely closes access to commodity markets.
Celsius was one of the prominent companies in the successive major collapses in the crypto market in 2022. The collapse of the company was among the developments that deepened the loss of confidence in the sector.
What was the main charge against Celsius?
According to the regulator’s statement, Celsius was suffering heavy losses while telling customers that their assets were safe and continuing to generate returns. The CFTC argued that the company’s narrative that its digital assets-based finance platform is safe, profitable and compliant does not reflect reality.
Celsius was known as a lending platform that allowed users to earn returns by investing crypto assets. The company had grown rapidly with its crypto asset lending model; but with the liquidity crisis in 2022, its operations collapsed.
In the CFTC decision, it was emphasized that the company faced devastating losses while Celsius continued to provide assurance to customers.
The latest decision shows that Mashinsky has been excluded from the system not only in terms of criminal law, but also within the framework regulating the US commodity derivative markets. According to court records, the ban is permanent and covers all commodity activities.
