Celsius founder Alex Mashinsky arrested for crypto fraud

<img width="250" height="151" src="https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-250×151.jpg" class="webfeedsFeaturedVisual wp-post-image" alt="Celsius" decoding="async" style="float: left; margin-right: 5px;" link_thumbnail="" srcset="https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-250×151.jpg 250w, https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-700×422.jpg 700w, https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-768×463.jpg 768w, https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-120×72.jpg 120w, https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-245×148.jpg 245w, https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network-500×301.jpg 500w, https://www.leaprate.com/wp-content/uploads/2023/07/Celsius-network.jpg 880w" sizes="(max-width: 250px) 100vw, 250px" /><p>Likewise, the Commodities Futures Trading Commission (CFTC) brought similar charges against the crypto lender and its founder. The CFTC asserted that Celsius and Mashinsky operated an extensive commodity pool scheme involving digital asset commodities.</p>
<p>The derivatives regulator announced a settlement agreement with Celsius, which includes a court order permanently prohibiting the company from engaging in such activities in the future. Conversely, the CFTC will continue pursuing litigation against Mashinsky, seeking the return of customers&#8217; assets and illegal profits, as well as imposing a civil monetary penalty. Additionally, the derivatives watchdog aims to secure a permanent ban on trading and registration for the Founder of Celsius through a court order.</p>
<p>Director of Enforcement Ian McGinley commented:</p>
<blockquote><p>As companies and individuals develop new products and services utilizing digital asset commodities, they must adhere to the long-established rules prohibiting fraud in the market and comply with the registration requirements of the Commodity Exchange Act</p></blockquote>
<p>He added:</p>
<blockquote><p>This case is the CFTC’s first against a digital asset lending platform, and it demonstrates the agency will not shy away from ensuring the law is enforced in the digital asset arena. Innovation does not equate to immunity from compliance with the law.</p></blockquote>
<h2>FTC $4.7 billion settlement</h2>
<p>Meanwhile, the Federal Trade Commission (FTC) announced a $4.7 billion settlement which is one of the biggest in the agency’s history. The FTC highlighted the repeated deceptions by Celsius and Mashinsky.</p>
<p>Celsius and its executives were accused by the FTC of providing false information to investors regarding the presence of a $750 million insurance policy covering their deposits. Additionally, they allegedly misled investors by claiming to have sufficient reserves to fulfill their obligations to customers.</p>
<p>Furthermore, the FTC claimed that <a href="https://www.leaprate.com/tag/celsius-network/" target="_blank" rel="noopener">Celsius</a> lacked a system to monitor its assets and liabilities until mid-2021. As a consequence, the FTC imposed a $4.7 billion fine on Celsius and its affiliates. However, the FTC stated that it had reached an agreement with the companies to temporarily suspend the &#8220;judgment&#8221; to allow Celsius to return its remaining assets to customers through bankruptcy proceedings.</p>
<p>Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said:</p>
<blockquote><p>Celsius touted a new business model but engaged in an old-fashioned swindle. Today’s action banning Celsius from handling people’s money and holding its executives accountable should make clear that emerging technologies are not above the law.</p></blockquote>
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