An investigation by the Commodity Futures Trading Commission (CFTC) reportedly concluded that bankrupt crypto lender Celsius Network and its former CEO, Alex Mashinsky, violated US laws prior to the firm’s meltdown last year.
According to Bloomberg, attorneys with the CFTC’s enforcement unit found that Celsius misled investors and failed to register with the regulator, they also claim that Mashinsky broke regulations.
Citing people familiar with the matter, the report says that the CFTC could file a case against the firm as early as this month if a majority of the agency’s commissioners agree with the investigators’ findings.
Bankruptcy filings indicate that the U.S. Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Southern District of New York are also investigating Celsius.
Mashinsky already faces legal action. In a lawsuit seeking to ban the Celsius co-founder from doing business and requiring him to pay damages, New York Attorney General Letitia James accuses Mashinsky of making false statements about the safety of the lending platform and concealing the deteriorating financial condition of the company.
James also alleges that Mashinsky defrauded hundreds of thousands of investors, including more than 26,000 New Yorkers, of billions of dollars.
Says James following the filing of the suit in January,
“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin. The law is clear that making false and unsubstantiated promises and misleading investors is illegal.”
In a bid to dismiss the case, Mashinsky says that the suit shows a fundamental misunderstanding of how Celsius works and his role in the business.
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