CFTC to find Celsius and Former CEO Mashinsky violated US rules, Bloomberg reports
2 mins read

CFTC to find Celsius and Former CEO Mashinsky violated US rules, Bloomberg reports


Commodity Futures Trading Commission (CFTC) investigators have reportedly found that crypto lending platform Celsius Network violated US regulations before bankruptcy. These violations also implicated the firm’s former CEO, Alex Mashinsky, as reported by Bloomberg.

If the CFTC’s commissioners concur with the investigation’s findings, legal proceedings against Celsius and Mashinsky could commence within the month.

As Bloomberg reported, investigators have concluded that under Mashinsky’s leadership, Celsius misled investors and breached regulatory standards. These developments add complexity to the ongoing scrutiny around Celsius, which has been under fire from various quarters.

Former Celsius investors recently accused Wintermute, one of Celsius’s market makers, of market manipulation. According to the plaintiffs, Wintermute was allegedly involved in wash trading to artificially inflate Celsius’s trading volumes. The extent of Wintermute’s involvement with Celsius remains unclear, and the market maker has denied all allegations of wrongdoing.

During these legal scenarios, Celsius has been stabilizing its financial situation. As of July 1, 2023, the bankruptcy court authorized the bankrupt crypto lender to convert all its altcoins into Bitcoin (BTC) and Ethereum (ETH), according to a June 30 court filing detailed by CryptoSlate.

This move could be interpreted as an attempt by Celsius to maximize asset value and potentially meet any impending legal and financial obligations. The decision came after Celsius held discussions with the SEC following regulatory actions that classified several digital assets as securities. In response, Judge Martin Glenn gave Celsius the green light to use “commercially reasonable efforts to get the maximum value from the altcoins they intend to convert to BTC or ETH.”

Meanwhile, the ongoing bankruptcy proceedings of Celsius are moving forward. Developments earlier this year saw crypto consortium Fahrenheit emerge as the winner of the court-approved auction to sell Celsius’s assets, marking a significant step towards the company reopening and returning funds to creditors. According to a May 25 statement by Celsius, Fahrenheit will provide the necessary capital, management team, and technology to establish and operate a new company, NewCo.

Regarding the Bloomberg report, the company stated, “The CFTC declined to comment. Representatives and attorneys for Celsius didn’t respond to multiple requests for comment by email and telephone. Mashinsky and his attorney also didn’t respond to requests for comment.” CryptoSlate has been unable to validate further the comments made to Bloomberg as of press time.

The post CFTC to find Celsius and Former CEO Mashinsky violated US rules, Bloomberg reports appeared first on CryptoSlate.



Source link