Celsius Founder Faces Permanent Trading Ban After Fraud Conviction

Nearly three years after Celsius unraveled, the CFTC has closed its civil enforcement case against founder Alexander Mashinsky with a federal consent order imposing permanent trading and registration bans. The decision marks another chapter in the fallout from a crypto lender that regulators alleged attracted about $20 billion in customer funds through misleading claims about safety and profitability.

Key Takeaways:

• • Federal regulators secured permanent trading and registration bans against Celsius founder Alexander Mashinsky.
• • Authorities alleged Celsius attracted about $20 billion through misleading safety and profitability claims.
• • Meanwhile, SEC, FTC, and DOJ actions widened the legal fallout after Celsius collapsed.

CFTC Consent Order Ends Civil Case Against Alexander Mashinsky

The Commodity Futures Trading Commission (CFTC) resolved its enforcement action against Alexander Mashinsky, founder and former CEO of Celsius Network LLC, after a federal court entered a consent order on June 18. The order imposes permanent trading and registration bans and bars future violations of certain anti-fraud provisions.

The U.S. District Court for the Southern District of New York entered the order nearly three years after Celsius filed for bankruptcy. The CFTC complaint alleged Celsius received customer funds totaling about $20 billion in value through its digital asset-based finance platform.

Citing the Commodity Exchange Act (CEA), the CFTC order states:

“The consent order permanently enjoins Mashinsky from further violations of certain anti-fraud provisions in the CEA and CFTC regulations and imposes permanent trading and registration bans against him.”

Customers used Celsius to pool digital assets that the company deployed to generate revenue, regulators alleged. Celsius purportedly returned that revenue through weekly interest payments or “rewards,” while marketing the platform as a safer alternative for digital asset holders.

The CFTC filed its complaint against Celsius and Mashinsky on July 13, 2023. The agency alleged that from 2018 through at least June 2022, Mashinsky and Celsius defrauded hundreds of thousands of customers by misrepresenting the platform’s safety, profitability, and regulatory compliance.

Risky Loans and Federal Cases Followed Celsius Marketing Claims

Regulators alleged Mashinsky promoted Celsius through public videos, blog posts, livestreams, social media posts, and the company’s website. He touted Celsius as a “safe” alternative similar to a traditional bank for customers’ digital assets while promising high-yield interest payments on deposits.

Celsius used increasingly risky investment strategies to meet promised returns, the CFTC alleged. Those strategies included millions of dollars in uncollateralized loans and unregulated decentralized finance agreements, even as the company continued telling customers their assets were safe and earning rewards.

The CFTC noted:

“On July 17, 2023, the court entered a consent order of permanent injunction against Celsius, leaving Mashinsky as the only remaining defendant.”

SEC, FTC, DOJ Actions Widened Celsius Legal Fallout

Federal agencies also pursued Celsius and Mashinsky through separate actions. The Securities and Exchange Commission (SEC) charged Celsius and Mashinsky in July 2023 with fraud, unregistered securities offerings, false and misleading investor statements, and manipulation of the CEL token market.

The Federal Trade Commission (FTC) also brought a consumer protection case tied to Celsius. Celsius agreed to a settlement that included a permanent ban on handling consumer assets, while the FTC alleged the company misled consumers about the safety of customer deposits and the health of its business.

Criminal prosecutors separately pursued Mashinsky over related conduct. The U.S. Attorney’s Office for the Southern District of New York filed a parallel case on July 11, 2023, and Mashinsky pleaded guilty Dec. 3, 2024, to one count of commodities fraud and one count of securities fraud.

The CFTC noted:

“On May 8, 2025, Mashinsky was sentenced to 12 years in prison and ordered to pay a $50,000 fine and forfeiture of $48,393,446 for committing commodities fraud and securities fraud at Celsius.”

Prosecutors said Celsius held about $25 billion in assets at its peak in the fall of 2021. Before the platform halted withdrawals on June 12, 2022, Mashinsky withdrew $8 million worth of his own non-CEL assets, while hundreds of thousands of customers had $4.7 billion in inaccessible assets.