The Commodity Futures Trading Commission settled its case against former Celsius CEO Alexander Mashinsky, who is currently serving a 12-year prison sentence. On Thursday, the CFTC announced that the U.S. District Court for the Southern District of New York had entered a consent order prohibiting Mashinsky from engaging in future violations of anti-fraud provisions and imposing permanent bans on trading and registration. The settlement resolves the CFTC's fraud allegations against Mashinsky, who was arrested in 2023 after U.S. prosecutors alleged he defrauded customers and misrepresented Celsius' profitability.
Court Imposes Permanent Trading and Registration Bans
The consent order entered by the U.S. District Court for the Southern District of New York prohibits Mashinsky from engaging in future violations of anti-fraud provisions. The court also imposed permanent bans on trading and registration. The CFTC sued Celsius and Mashinsky in 2023 and said the former CEO defrauded customers and misrepresented the safety of the platform while engaging in risky investment strategies.
Mashinsky Sentenced to 12 Years for Fraud Charges
Mashinsky was arrested in 2023 after U.S. prosecutors alleged he defrauded customers and misrepresented Celsius' profitability. He pled guilty to one count of commodities fraud and one count of securities fraud. Mashinsky was later sentenced to 12 years in prison and ordered to pay almost $50 million in fines.
Celsius Filed Bankruptcy in 2022 and Wound Down in 2024
Celsius operated as a crypto lender that allowed customers to earn interest and take out loans. The company filed for bankruptcy in 2022 and was later wrapped up in 2024. As part of Celsius' wind-down, some funds were used to create a new bitcoin mining company called Ionic Digital.
SEC and FTC Filed Separate Lawsuits Against Mashinsky
The Securities and Exchange Commission sued the crypto lender and Mashinsky in 2023 for allegedly raising billions through fraudulent and unregistered sales of crypto, repeatedly lying to investors about Celsius' financial standing and manipulating the price of CEL, the company's native token. Last month, Mashinsky reached a $10 million settlement with the Federal Trade Commission after the agency said Mashinsky and other Celsius executives engaged in "deceptive and unfair acts or practices" in marketing crypto lending and custody services.
FAQ
What did the CFTC settlement with Alexander Mashinsky include?
The CFTC settlement included a consent order entered by the U.S. District Court for the Southern District of New York that prohibits Mashinsky from engaging in future violations of anti-fraud provisions and imposes permanent bans on trading and registration.
What criminal charges did Alexander Mashinsky plead guilty to?
Alexander Mashinsky pled guilty to one count of commodities fraud and one count of securities fraud. He was sentenced to 12 years in prison and ordered to pay almost $50 million in fines.
When did Celsius file for bankruptcy and complete its wind-down?
Celsius filed for bankruptcy in 2022 and completed its wind-down in 2024. As part of the wind-down process, some funds were used to create a new bitcoin mining company called Ionic Digital.
