CFTC Settlement Imposes Lifetime Trading Prohibition on Celsius Founder Mashinsky
Alex Mashinsky, the founder of Celsius, has reached a settlement with the US commodities regulator, bringing closure to the agency's inaugural enforcement action targeting a cryptocurrency lending platform.
The US Commodity Futures Trading Commission has concluded its enforcement proceedings against Alex Mashinsky, the founder of Celsius Network, implementing a lifetime prohibition on his participation in trading activities within markets under the commodities regulator's jurisdiction.
According to the CFTC's announcement on Thursday, a court-approved consent order additionally prohibits Mashinsky from pursuing registration with the regulatory body in perpetuity and brings to a close the enforcement proceeding that was initially launched in 2023.
Mashinsky and Celsius engaged in a scheme to defraud hundreds of thousands of customers by mispresenting the safety, profitability, and regulatory compliance of Celsius' digital asset-based finance platform.
CFTC
The most recent order ensures that Mashinsky will be permanently prohibited from participating in trading activities involving US commodities, futures contracts and derivative instruments. In a development earlier this year, both the CFTC and the US Securities and Exchange Commission released guidance indicating their position that the majority of prominent cryptocurrencies should be classified as commodities.
The resolution of this settlement additionally concludes the CFTC's inaugural enforcement case brought against a digital asset-based lending platform and represents the conclusion of one of the final outstanding regulatory proceedings involving Mashinsky.
In May 2025, Mashinsky received a 12-year prison sentence following his guilty plea to charges of securities fraud and commodities fraud for providing deceptive information to Celsius' customer base regarding the security of the cryptocurrency lending platform, which ultimately failed during a significant market decline in 2022.
According to the CFTC's allegations, Celsius accumulated approximately $20 billion in customer funds and pursued high-risk investment strategies in order to achieve the yields that had been promised to clients.
Mashinsky has previously been prohibited from any future involvement in the cryptocurrency or financial services sectors following his settlement of a Federal Trade Commission complaint in April that imposed a permanent restriction preventing him from association with any product or service capable of being utilized to "deposit, exchange, invest, or withdraw assets."
Mashinsky continues to face charges brought by the SEC in July 2023, which accuse him of conducting an unregistered securities offering, providing misleading representations about Celsius' operations and security measures, and engaging in price manipulation of the company's Celsius (CEL) token.
In late May, the SEC informed a federal court that it has "engaged in substantive settlement discussions" with Mashinsky, though no settlement arrangement had been finalized, with the court approving the regulators' petition for an additional 60-day period to pursue ongoing negotiations.
On May 26, Mashinsky submitted a filing seeking to vacate his 12-year criminal sentence, asserting that his legal representation was inadequate, that evidentiary materials were compromised by official misconduct, and that Sam Bankman-Fried, the FTX co-founder and convicted fraudster, bore responsibility for the manipulation of the CEL token.
On Saturday, a court directed prosecutors to file their response to Mashinsky's petition by the middle of August.