Celsius Founder Alex Mashinsky Banned from CFTC-Regulated Markets
The Commodity Futures Trading Commission (CFTC) has resolved its 2023 enforcement action against Celsius founder Alex Mashinsky, permanently banning him from trading in markets regulated by the CFTC. The consent order also imposes a permanent registration ban, marking the CFTC's first case against a digital asset lending platform. Mashinsky, who was CEO of Celsius, is currently serving a 12-year prison sentence after pleading guilty to securities and commodities fraud related to the collapse of his lending business, which paused withdrawals and left customers unable to access billions in deposits. Celsius filed for bankruptcy, causing over $5 billion in customer losses. Additionally, Mashinsky faced civil lawsuits from the SEC and FTC, with allegations of stealing about $42 million from customers. Earlier this year, the FTC settled with Mashinsky, reducing a $4.7 billion judgment to $10 million, and permanently banned him from working in crypto. In May, Mashinsky filed a motion to vacate his sentence, claiming ineffective counsel and conflict of interest due to his legal firm's involvement with FTX co-founder Sam Bankman-Fried, who is serving a 25-year sentence for FTX's fraud.
Key facts
- CFTC permanently bans Mashinsky from regulated trading markets.
- Mashinsky imprisoned for 12 years for securities and commodities fraud.
- Celsius collapse caused over $5 billion in customer losses.
- FTC permanently banned Mashinsky from crypto work earlier this year.
- Mashinsky seeks to vacate sentence citing conflict of interest with SBF.