The US Commodity Futures Trading Commission (CFTC) has put an end to the case against Celsius. A federal court approved a settlement in the lawsuit that the agency filed against the company's founder, Alex Mashinsky, back in 2023.

Under the ruling of the Southern District of New York court, Mashinsky has permanently lost the right to trade on markets supervised by the CFTC and will no longer be able to "register with the agency in any capacity."

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What the CFTC case against Celsius covered

With this, the CFTC investigation is considered complete. Mashinsky will also no longer be able to violate the anti-fraud provisions of the Commodity Exchange Act (CEA) and the agency's internal rule.

"The court order permanently bars Mashinsky from committing violations of a number of anti-fraud provisions of the CEA and CFTC rules, and also permanently deprives him of the right to trade and register on regulated markets," the CFTC reported.

The CFTC filed the lawsuit against Celsius and Mashinsky in July 2023. Regulators accused the company and its founder of deceiving hundreds of thousands of clients.

"The lawsuit states: Celsius was a platform on which clients lent the company their digital assets and used them to generate income that was supposedly to be paid to users in the form of weekly payouts or “rewards”," the agency's statement says.

The complaint examines the company's activities from 2018 through June 2022 inclusive. According to the regulator, Mashinsky promoted Celsius as a "reliable, bank-like platform for storing and using digital assets."

He promised clients high returns while the platform itself took on ever greater risks. It issued unsecured loans and entered into risky deals in the decentralized finance (DeFi) sector.

Source: BeInCrypto