By
Bena Ilyas
April 29th, 2024
CFTC investigators claim that they have reasons to believe that the bankrupt lender and its former CEO violated the rules of the agency.
It appears that yet another trouble may be lurking around the corner for failed crypto lender Celsius Network and its former CEO Alex Mashinsky. According to a recent Bloomberg report, the Commodity Futures Trading Commission (CFTC) might already be building a case against the firm and Mashinsky. The report also claims that the case may even surface as early as this July, per inside sources.
Celsius CEO Allegedly Misled Investors
Bloomberg reports that CFTC investigators claim that they have reasons to believe that the bankrupt lender and its former CEO violated the rules of the agency. That is, in terms of misleading investors. So, if a majority of the CFTC’s commissioners can agree to pursue a case, then there will be a case.
The new submission by CFTC is similar to the report of former prosecutor Shoba Pillay. After Celsius filed for US bankruptcy last July, US Bankruptcy Judge Martin Glenn, who is overseeing the bankruptcy proceedings, appointed Pillay as an independent examiner.
Her duty was to find out if there was any truth to Celsius customers’ claims that the firm was indeed a Ponzi scheme. She was also tasked with reporting on Celsius’ handling of cryptocurrency deposits.
However, the examiner’s report wasn’t exactly conclusive at the time. Pillay determined that there were times when Celsius truly operated like a Ponzi scheme. She said Celsius did not exactly disclose to its customers, the risks it took with their crypto assets. The report read in part:
“How Celsius ran its business differed significantly from what Celsius told its customers.”
As of publication, the CFTC is yet to make an official statement regarding the potential case, whereas efforts to reach Celsius’ press have also proved abortive.
Meanwhile, it might also be worth noting that the Securities and Exchange Commission and federal prosecutors in Manhattan are also looking into Celsius. That is according to bankruptcy filings.
