US CFTC May Sue Celsius And Former CEO Mashinsky Earlier This Month: Report

Key Points:

• CFTC investigators concluded Celsius crypto lender, former CEO broke the rules before the company went bankrupt.
• The regulator will vote on making the case as soon as this month.
• If a majority of the agency’s trustees agree with that conclusion, the regulator can file a lawsuit in federal court.

Celsius and its former Mashinsky chief executive could face a lawsuit from the CFTC alleging violations of some US rules before the company’s collapse.

According to a report from Bloomberg and people familiar with the matter, investigators from the US Commodity Futures Trading Commission (CFTC) have concluded that bankrupt crypto lender Celsius Network and its former CEO violated US rules before ending up in bankruptcy as it is now.

With the conclusion, the agency could file a lawsuit in federal court as early as this month under US rules if a majority of the trustees uphold the finding. One of the people said that law enforcement attorneys have determined that Celsius misled investors and should have registered with the regulator and that former CEO Alex Mashinsky had also broken the rules.

According to May court filings, the Securities and Exchange Commission (SEC) and federal prosecutors from Manhattan have also launched a series of investigations into the company. Bloomberg notes that both the SEC and representatives of the United States Attorney’s Office for the Southern District of New York declined to comment on the status of the investigations.

On June 16 last year, securities regulators from five different US states opened an investigation into Celsius three days after the company abruptly stopped withdrawing user funds on May 13.

As of today’s update, the lending platform has taken steps to move around 74 million altcoins into Bitcoin (BTC) and Etherum (ETH) in a plan to refund users stuck on the platform. According to the balance sheet for April, the total altcoin sell pressure amounts to $279M.

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