The CFTC secured a permanent ban against Celsius founder Alex Mashinsky under a consent order announced Thursday. The regulator alleged that Mashinsky and Celsius engaged in a fraudulent scheme that misled hundreds of thousands of customers about the safety, profitability, and regulatory standing of the company's crypto lending platform, which collapsed in 2022. The settlement concludes one of the CFTC's biggest crypto-related enforcement actions and marks the agency's first case involving a digital asset lending platform, following Celsius' receipt of approximately $20 billion in customer funds.
CFTC Imposes Permanent Trading Ban on Mashinsky
Under the court-approved consent order, Mashinsky is permanently prohibited from trading commodities, futures, and derivatives in the United States and is barred from ever registering with the CFTC. The regulator stated that Celsius attracted billions of dollars from users by promoting itself as a secure and reliable platform while allegedly concealing the risks associated with its operations and investment strategies. According to the CFTC, Celsius made risky investments to generate the returns it promised to users.
Mashinsky Sentenced to 12 Years in May 2025, FTC Bans Crypto Work
In May of 2025, Mashinsky was sentenced to 12 years in prison after pleading guilty to securities and commodities fraud charges linked to misleading customers about Celsius' financial condition and business practices. The crypto lender collapsed during the market downturn of 2022, which left many customers unable to access their funds.
Earlier this year, Mashinsky settled a complaint with the Federal Trade Commission, which resulted in a permanent ban from working in the cryptocurrency or financial services sectors. The FTC order prohibits him from participating in any business involving products or services used to deposit, exchange, invest, or withdraw assets.
SEC Civil Lawsuit Remains Ongoing
Mashinsky still faces a civil lawsuit from the US Securities and Exchange Commission. The SEC alleges that he conducted an unregistered securities offering, misrepresented Celsius' operations and safety measures, and manipulated the price of the platform's native CEL token. Regulators recently informed a federal court that settlement discussions are ongoing, although no agreement has been reached yet.
Mashinsky Files Appeal Challenging Criminal Sentence
In a filing submitted in late May, Mashinsky asked the court to vacate his 12-year prison term, arguing that his legal representation was ineffective and that government misconduct tainted key evidence. He also claimed that former FTX CEO Sam Bankman-Fried played a role in manipulating the price of the CEL token.
FAQ
What did the CFTC ban Alex Mashinsky from doing?
The CFTC permanently prohibited Mashinsky from trading commodities, futures, and derivatives in the United States and barred him from ever registering with the CFTC under a court-approved consent order announced Thursday.
Why was Alex Mashinsky sentenced to prison?
Mashinsky was sentenced to 12 years in prison in May of 2025 after pleading guilty to securities and commodities fraud charges linked to misleading customers about Celsius' financial condition and business practices.
What allegations does the SEC have against Mashinsky?
The SEC alleges that Mashinsky conducted an unregistered securities offering, misrepresented Celsius' operations and safety measures, and manipulated the price of the platform's native CEL token. Settlement discussions are ongoing.
