The U.S. Commodity Futures Trading Commission has settled its enforcement action against Celsius Network founder Alex Mashinsky, with a federal court consent order permanently barring him from trading in CFTC-regulated markets and from registering with the agency. The action closes the CFTC’s first case against a digital asset lending platform operator, filed in July 2023. Celsius had already settled, leaving Mashinsky as the final defendant.
Misleading customers about safety and profits
The CFTC alleged Mashinsky and Celsius misled customers on the safety, profitability and legal status of the crypto lending business, orchestrating a “scheme to defraud” hundreds of thousands of users. According to regulators, Celsius pooled customer crypto to seek weekly returns while taking on increasing risks — including uncollateralized loans and risky DeFi plays — even as it assured customers their assets were safe. Celsius took in roughly $20 billion in customer funds during the period in question, later filing for bankruptcy after heavy losses and a withdrawal freeze, becoming one of the major crypto lending failures of 2022.
Criminal sentence and FTC order already in place
Mashinsky is serving a 12-year federal prison sentence after pleading guilty to commodities and securities fraud in May 2025, with a $50,000 fine and forfeiture of over $48 million. A separate Federal Trade Commission order from April 2026 bars him from promoting or offering deposit, exchange, investment or withdrawal services, carrying a $4.72 billion judgment — though most of it is suspended if he meets payment and disclosure terms. Celsius’ bankruptcy process has also continued: a third creditor distribution of $220.6 million began in August 2025, bringing recoveries to 64.9% of claims.
SEC case remains open; prison appeal pending
Mashinsky still faces a civil lawsuit from the Securities and Exchange Commission over unregistered securities offerings, false statements, and manipulation of the CEL token. He has asked a federal court to vacate his conviction, blaming former FTX chief Sam Bankman-Fried for CEL manipulation and citing issues with his legal defense. A court has ordered prosecutors to respond by mid-August. The CFTC’s lifetime ban adds to restrictions from crypto and asset-related services, but does not end all legal battles tied to Celsius’ collapse.