CFTC Permanently Bans Celsius Founder Mashinsky From U.S. Markets After $20B Crypto Collapse

The U.S. Commodity Futures Trading Commission (CFTC) announced on June 18 that a federal court has approved a consent order permanently banning Celsius founder Mashinsky from trading in markets regulated by the agency. The ruling also prohibits him from registering with the CFTC and bars him from future violations of key anti-fraud provisions under the Commodity Exchange Act.

The order resolves the regulator’s enforcement action filed in 2023, bringing to a close one of the agency’s most significant cases involving a digital asset lending platform.

Mashinsky Permanently Barred From CFTC-Regulated Markets

According to the CFTC, the U.S. District Court for the Southern District of New York entered a consent order against Mashinsky, founder and former CEO of Celsius Network.

A U.S. judge approved an FTC settlement permanently banning Mashinsky from promoting crypto products, alongside a $10M payment and a suspended $4.72B judgment. Source: @coinbureau via X

Under the settlement, Mashinsky is permanently prohibited from participating in commodities, futures, and derivatives markets overseen by the agency. The order also imposes a lifetime registration ban.

While the civil resolution does not include additional monetary penalties, it serves as a permanent injunction against future violations of anti-fraud regulations.

The case marks the completion of what the CFTC described as its first enforcement action against a digital asset lending platform operator.

Allegations Centered on Customer Misrepresentations

The regulator originally sued Celsius and Mashinsky in July 2023, alleging that the company misled customers about the safety and profitability of its crypto lending business between 2018 and 2022.

A federal court permanently banned Alex Mashinsky from CFTC-regulated markets over allegations that Celsius misled customers and risked nearly $20 billion in assets before its 2022 collapse. Source: Cigarer via X

According to the complaint, Celsius promoted itself as a secure alternative to traditional banking services while offering attractive yields on customer deposits. Regulators argued that these public representations did not reflect the actual risks being taken with customer assets.

The CFTC alleged that Mashinsky repeatedly portrayed Celsius as a “safe” platform through videos, livestreams, blog posts, social media content, and company marketing materials.

At the same time, regulators claimed Celsius deployed customer funds into increasingly risky strategies, including large uncollateralized loans and decentralized finance (DeFi) transactions that lacked sufficient safeguards.

The agency stated that Celsius ultimately collected approximately $20 billion in customer assets before suffering substantial losses and entering bankruptcy proceedings in 2022.

In its complaint, the regulator alleged that Mashinsky and Celsius engaged in a “scheme to defraud” hundreds of thousands of customers by misrepresenting the platform’s safety, profitability, and regulatory standing.

Celsius Collapse Remains One of Crypto’s Largest Failures

Celsius became one of the most prominent casualties of the crypto market downturn in 2022.

The company halted customer withdrawals amid mounting liquidity pressures before filing for bankruptcy protection. The collapse left many users unable to access their funds and triggered multiple investigations from federal agencies.

The failure also intensified scrutiny of crypto lending platforms that had attracted billions of dollars by promising high yields during the industry’s bull market.

A chart of the CEL token’s historical performance reflects the dramatic rise and fall of the business. CEL surged to nearly $8 during the 2021 crypto boom before collapsing alongside the company’s bankruptcy in 2022.

Criminal Conviction Already Led to Prison Sentence

The latest CFTC action comes after Mashinsky’s criminal conviction on fraud-related charges.

In December 2024, he pleaded guilty to one count of commodities fraud and one count of securities fraud in a parallel federal criminal case.

The CFTC has formally resolved its 2023 enforcement case against Celsius founder Alex Mashinsky through a court-approved consent order in the Southern District of New York. Source: CFTC via X

A U.S. judge later sentenced him in May 2025 to 12 years in prison. The court also imposed a $50,000 fine and ordered forfeiture of approximately $48.4 million.

Federal prosecutors argued that Celsius raised roughly $20 billion from customers while exposing those assets to increasingly aggressive investment strategies in an effort to generate promised returns.

The criminal sentence remains one of the most severe penalties imposed on a former executive of a major crypto lending platform.

Additional Regulatory Cases Continue

Although the CFTC case has now been resolved, Mashinsky continues to face legal and regulatory challenges.

The U.S. Securities and Exchange Commission (SEC) still maintains an ongoing civil lawsuit alleging unregistered securities offerings, misleading statements to investors, and manipulation involving the CEL token.

Separately, the Federal Trade Commission (FTC) reached a settlement that permanently bars Mashinsky from promoting or offering products related to cryptocurrency and financial services.

That agreement included a $4.72 billion judgment, although most of the amount remains suspended subject to compliance with payment and disclosure requirements. Mashinsky also agreed to pay $10 million under the FTC settlement.

Meanwhile, bankruptcy proceedings tied to Celsius continue to return funds to creditors. Court-supervised distributions have already delivered billions of dollars in recoveries, with previous reports indicating creditor recoveries approaching 65% of approved claims.

Mashinsky has also sought to challenge his criminal sentence through federal court filings, arguing that aspects of his legal representation were ineffective. Prosecutors have been directed to respond to those claims as the appeal process moves forward.

For now, however, the latest court order ensures that the former Celsius CEO will remain permanently excluded from U.S. commodity markets, adding another lasting consequence to one of the crypto industry’s most consequential collapses.