- The CFTC has concluded that Celsius and former CEO Alex Mashinsky violated U.S. regulations.
- The regulator may file a federal lawsuit against the bankrupt crypto lender as soon as this month.
- Celsius Network’s native token CEL lost over 12% following the latest development.
The Commodities and Futures Trading Commission (CFTC) has determined that Celsius Network breached U.S. regulations under its co-founder and former Chief Executive Alex Mashinsky. According to the commodities regulator, the crypto lending firm and its disgraced founder misled investors before its downfall in July last year.
According to a report by Bloomberg, the CFTC’s probe into the Celsius Network led to the conclusion that the crypto platform, along with Alex Mashinsky, concealed key financial information from the company’s investors in a bid to mislead them. The details come nearly a year after the crypto lender suspended withdrawals and filed for bankruptcy.
People familiar with the matter told Bloomberg that if CFTC’s commissioners reach an agreement regarding the probe’s conclusion, the commodities regulator may file a federal lawsuit against the Celsius Network as soon as this month. Attorneys from the enforcement division of the CFTC determined that Celsius should’ve registered with the agency.
CFTC’s attorneys further concluded that the actions of Alex Mashinsky and his crypto firm were a breach of the country’s regulations. This would become the second enforcement action against Mashinsky after he was sued by the Attorney General of New York earlier this year. The lawsuit filed by the state of New York accused the former Celsius CEO of misrepresenting the company’s financial health and making false statements about the safety of his platform.
Recent court filings by the Celsius Network revealed that it was already facing regulatory inquiries from American agencies, including the Securities and Exchange Commission and the Washington Department of Financial Institutions Securities Division. News of the potential lawsuit by the CFTC led to a decline of over 12% in the price of CEL, the native token of Celsius.
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