Celsius Founder's Trading Privileges Go From "Earn" to Permanently Unavailable 🥶

The U.S. Commodity Futures Trading Commission has closed out its civil case against Celsius founder and former CEO Alex Mashinsky with a court order permanently banning him from U.S. commodity markets. Under a consent order entered by the U.S. District Court for the Southern District of New York, Mashinsky is permanently prohibited from violating anti-fraud provisions of the Commodity Exchange Act, faces lifetime restrictions from participating in regulated U.S. commodity markets, and is barred from registering with the CFTC in any capacity.

The order resolves the CFTC's July 2023 lawsuit, which accused Mashinsky and Celsius of misleading customers about the safety, profitability, and regulatory status of the company's crypto lending platform. Mashinsky admitted to violating Section 6(c)(1) of the Commodity Exchange Act and related CFTC anti-fraud regulations. The injunction permanently bars him from trading commodity interests, entering commodity-related transactions, controlling trading accounts, soliciting funds for commodity trading, and acting as a principal, employee, officer, or agent of any entity registered with the CFTC.

According to the CFTC's complaint, between 2018 and 2022, Mashinsky and Celsius misrepresented the safety of customer deposits while promoting the platform as a secure alternative to traditional banking. The agency said Celsius pooled customer crypto assets and deployed them into increasingly risky investment strategies while continuing to assure users that their funds were safe. The regulator stated Celsius ultimately received approximately $20 billion in customer assets before filing for bankruptcy. Customers ended up losing more than $5 billion.

Mashinsky pleaded guilty in December 2024 to one count of commodities fraud and one count of securities fraud in a parallel criminal case. He was sentenced to 12 years in prison in May 2025 and ordered to pay a $50,000 fine, along with the forfeiture of approximately $48.4 million. The CFTC's civil action marked the regulator's first case against a digital asset lending platform. Mashinsky also faced civil lawsuits from the SEC and FTC, with the FTC settlement reducing an initial $4.7 billion judgment to $10 million, though it can be lifted if the regulator finds he failed to materially disclose assets.

In May, just over a year after his sentencing, Mashinsky filed a handwritten motion to vacate his 12-year prison sentence, citing ineffective counsel and a conflict of interest due to his legal firm's engagement with FTX co-founder and former CEO Sam Bankman-Fried, better known as SBF. Mashinsky claims that it was SBF that manipulated his firm's Celsius token (CEL) and led to harm for his firm and its customers. Bankman-Fried is serving his own 25-year prison sentence for his fraud convictions tied to the downfall of FTX.