The U.S. Commodity Futures Trading Commission (CFTC) has closed the case against Celsius. A federal court approved a settlement of the lawsuit that the agency filed against the company's founder Alex Mashinsky back in 2023.
By the ruling of the Southern District of New York court, Mashinsky permanently lost the right to trade on markets under CFTC oversight and will no longer be able to «register with the agency in any capacity».
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What the CFTC case against Celsius concerned
With this, the CFTC investigation is considered complete. Mashinsky will also no longer be able to violate the anti-fraud provisions of the Commodity Exchange Act (CEA) and the agency's internal rules.
«The court order permanently bars Mashinsky from committing violations of a number of anti-fraud provisions of the CEA and CFTC rules, and also permanently deprives him of the right to trade and register on regulated markets», — the CFTC said.
The CFTC filed a lawsuit against Celsius and Mashinsky in July 2023. Regulators accused the company and its founder of deceiving hundreds of thousands of clients.
«The lawsuit states: Celsius was a platform on which clients allowed the company to pool their digital assets and use them to generate income that was supposedly to be returned to users in the form of weekly payouts or “rewards”», — the agency's statement reads.
The complaint examines the company's activities from 2018 through June 2022 inclusive. According to the regulator, Mashinsky promoted Celsius as a «reliable, bank-like platform for storing and using digital assets».
He promised clients high returns while the platform itself took on ever-greater risks. It issued unsecured loans and entered into risky deals in the decentralized finance (DeFi) sector.
Source: BeInCrypto
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