If the conclusion is accepted by the majority of CFTC commissioners, the regulator may bring legal action in a federal court.
According to reports, the Commodity Futures Trading Commission (CFTC)’s investigations have found that the bankrupt cryptocurrency lender Celsius and its former CEO Alex Mashinsky broke a number of American laws before the business’s demise in 2022.
Lawyers from the CFTC’s enforcement division discovered evidence that Celsius deceived investors, failed to register with the regulatory organization, and identified many regulatory infractions by Mashinsky, according to sources cited in a July 5 Bloomberg report.
If the investigators’ conclusions are accepted by the majority of CFTC commissioners, the organization may file a lawsuit in U.S. federal court this month against the shut down crypto lender.
The results of the CFTC inquiry have led to an increase in the number of legal lawsuits against Celsius, which stopped operating as a platform for crypto lending. The New York Attorney General filed a lawsuit against Mashinsky in January, alleging investor fraud and huge financial losses.
On June 16th 2022, securities authorities from five U.S. states opened an inquiry into Celsius after the unexpected halt of user withdrawals on June 13th 2022.
According to court documents, federal prosecutors from Manhattan and the U.S. Securities and Exchange Commission (SEC) have also started looking into Celsius. However, neither the SEC nor the Southern District of New York’s U.S. Attorney’s Office have offered any updates on the status of their inquiries.
The regulatory scrutiny that Celsius and Mashinsky experienced underlines the industry’s growing emphasis on investor safety and compliance. In a sector that is changing quickly, authorities are attempting to curb potential wrongdoing and assure regulatory compliance.
The results of the inquiries and potential legal actions against Celsius will have a big impact on the cryptocurrency loan market and the regulatory control over digital asset platforms. The case emphasizes how crucial strong regulatory frameworks and openness are for safeguarding investors and preserving market integrity.