Celsius, the bankrupt cryptocurrency lender, and its former CEO Alex Mashinsky could be facing an enforcement action by the Commodity Futures Trading Commission (CFTC) as early as this month, according to a Bloomberg report citing people familiar with the matter.
Allegations against Celsius and Alex Mashinsky
The report states that CFTC investigators have concluded that the bankrupt lender and its CEO violated the regulator’s rules by misleading investors. If a majority of CFTC commissioners agree, the agency could file a complaint against them.
A request for comment sent to Celsius’ press inbox went unanswered. The CFTC did not immediately respond to CoinDesk’s request for comment.
Suspicious operations by Celsius
In January, an independent examiner appointed by U.S. courts found that Celsius had at times operated in a manner similar to a Ponzi scheme, a view shared by Vermont’s financial regulator.
“In all key respects – from how Celsius described its contract with its customers to the risks it took with their cryptocurrency assets – how Celsius conducted its business differed significantly from what Celsius had told its customers,” wrote the examiner appointed by the U.S. court.
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