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The crumbling empire of the former cryptocurrency lending giant, Celsius, faces more adversities as a result of a recent investigation conducted by the Commodity Futures Trading Commission (CFTC). This federal investigation allegedly discovered that the company, along with its previous CEO, Alex Mashinsky, breached a variety of U.S. regulations before the firm's dramatic crash.
The investigatory team, composed of CFTC lawyers, claims that Celsius misled its investors and evaded regulatory registration. Furthermore, they contend that Mashinsky was a key participant in the violation of numerous rules. An official case could be lodged against the fallen crypto lender in U.S. federal court later this month, provided the CFTC commissioners' consensus aligns with the findings of the investigation.
This recent revelation marks another chapter in the growing saga of regulatory backlash against the once prominent crypto lending platform. Several other legal actions are already in process, with the former CEO under increased scrutiny. Mashinsky has been accused by the New York Attorney General of duping investors and being responsible for billion-dollar losses, in a lawsuit filed in early January.
Regulatory attention towards the crypto lender heightened significantly last June. Just three days after Celsius abruptly blocked its user withdrawals, securities regulators from five U.S. states launched investigations into the company. In addition to these state-level inquests, the Securities and Exchange Commission (SEC) along with federal prosecutors from Manhattan initiated several probes into the company's dealings, as evidenced by court filings in May.
Despite these developments, representatives from both the SEC and the U.S. Attorney's Office for the Southern District of New York have remained tight-lipped about their ongoing investigations. As for Celsius and its ex-CEO, the road ahead appears to be riddled with regulatory roadblocks and potential legal battles, painting a gloomy picture of what once was a bright spot in the cryptocurrency lending sector.
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