Commodity Futures Trading Commission (CFTC) investigators have reportedly found crypto lending platform Celsius Network violated U.S. regulations prior to bankruptcy. The breaches also reportedly involved the company’s former CEO, Alex Mashinsky. bloomberg.

If CFTC commissioners agree with the findings, legal proceedings against Celsius and Mashinsky could begin later this month.

As Bloomberg reported, investigators, led by Mashinsky, concluded that Mr. Celsius misled investors and violated regulatory standards. The developments further complicate the ongoing scrutiny of Mr Celsius, who has been widely criticized.

Former investors in Celsius recently accused Wintermute, one of Celsius’ market makers, of alleged market manipulation. The plaintiffs allege that Wintermute was involved in wash trading to artificially inflate the trading volume of Celsius. The extent of Wintermute’s involvement with Celsius remains unclear, with the market maker denying all allegations of wrongdoing.

Celsius has stabilized its financial position during these legal scenarios. According to a June 30 court filing detailing the details, the bankruptcy court ordered bankrupt cryptocurrency lenders to sell all altcoins they hold as of July 1, 2023 to Bitcoin ( BTC) and Ethereum (ETH). crypto slate.

The move could be interpreted as Celsius’s attempt to maximize property value and potentially meet its immediate legal and financial obligations. The decision comes after Celsius consulted with the SEC following regulatory action to classify some digital assets as securities. In response, Judge Martin Glenn gave Celsius the go-ahead to make “commercially reasonable efforts to extract the maximum value from the altcoins it intends to exchange for BTC or ETH.”

Meanwhile, the bankruptcy proceedings for Celsius are ongoing. In a development earlier this year, crypto consortium Fahrenheit emerged as the winner of a court-approved auction for the sale of Celsius assets, marking an important step toward the company’s reopening and return of funds to creditors. Fahrenheit will provide the capital, management team and technology needed to establish and operate the new company, NewCo, according to a May 25 statement from Celsius.

In response to Bloomberg’s report, the company said, “The CFTC declined to comment. Representatives and attorneys for Mr. Celsius did not respond to multiple emails and phone calls seeking comment. Mr. Mashinsky and his lawyers also commented. I did not comply with the request.” crypto slate At the time of writing, we were unable to further verify the comments received by Bloomberg.

Bloomberg’s report after the CFTC found Mr. Celsius and former CEO Mashinski violating U.S. rules first appeared on CryptoSlate.

By Jules

Leave a Reply