CFTC Secures Permanent Trading Ban Against Celsius Founder Alex Mashinsky

The Commodity Futures Trading Commission has secured a final judgment against former Celsius Network CEO Alex Mashinsky, bringing its civil enforcement action over one of the crypto industry’s largest collapses closer to completion.

According to a consent order entered by the U.S. District Court for the Southern District of New York, Mashinsky agreed to a permanent injunction, a lifetime trading ban, and a permanent prohibition on registering with the CFTC following the agency’s 2023 fraud case against him. The order resolves the remaining claims against Mashinsky after Celsius itself settled with the regulator in July 2023.

The CFTC announced the resolution on June 18, nearly three years after filing its enforcement action against Celsius and its founder. The regulator alleged that Mashinsky and Celsius misled customers about the safety, profitability, and regulatory status of the company’s crypto lending platform while taking increasingly aggressive risks with customer assets.

The latest order closes another chapter in the downfall of a firm that at one point managed approximately $20 billion worth of customer assets and became one of the most prominent names in crypto lending. FinanceFeeds previously covered how Mashinsky resolved a separate FTC case with a $10 million settlement, as several legal proceedings tied to Celsius moved toward completion.

CFTC Alleged Years Of Misrepresentations

The CFTC originally sued Celsius and Mashinsky in July 2023, alleging that the company operated a long-running scheme that misrepresented key aspects of its business to hundreds of thousands of customers.

According to the complaint, Celsius encouraged customers to deposit digital assets onto its platform in exchange for weekly interest payments, often referred to as rewards. The company pooled those assets and deployed them across various investment and lending strategies intended to generate returns.

The regulator alleged that from 2018 through at least June 2022, Mashinsky repeatedly portrayed Celsius as a safe alternative to traditional banking while assuring customers that their assets remained secure.

The complaint cited statements made through videos, livestreams, blog posts, social media channels, and the Celsius website. According to the CFTC, those communications presented Celsius as a low-risk platform despite the firm’s increasing reliance on risky and often uncollateralized activities.

The agency alleged Celsius extended millions of dollars in uncollateralized loans and entered high-risk decentralized finance transactions in an effort to generate the yields promised to customers. The model became part of the broader crypto credit boom that FinanceFeeds recently examined in its guide to why crypto lenders fail.

While customers were told their assets remained safe and continued to earn rewards, the company suffered significant losses that eventually contributed to its collapse.

The CFTC stated that customer funds were not secure as represented and that Celsius ultimately entered bankruptcy proceedings after receiving approximately $20 billion in customer assets. The allegations formed the basis of the regulator’s fraud claims against both the company and its founder.

Mashinsky Admitted To Fraud Violations

The newly entered consent order contains one of the most significant developments in the case.

Mashinsky admitted violating Section 6(c)(1) of the Commodity Exchange Act and CFTC Regulation 180.1, the agency’s primary anti-fraud provisions.

The court order permanently restrains and enjoins him from engaging in fraudulent conduct involving commodities transactions. Specifically, the order bars him from using deceptive devices or schemes, making false or misleading statements of material fact, and engaging in conduct that operates as fraud or deceit.

The order also imposes sweeping market restrictions.

Mashinsky is permanently prohibited from trading on or subject to the rules of any registered entity, entering transactions involving commodity interests, directing trading activity on behalf of others, soliciting customer funds for commodity transactions, registering with the CFTC, or acting as a principal, agent, officer, or employee of any entity registered with the Commission.

Those restrictions effectively remove him from participation in regulated U.S. derivatives and commodities markets, extending the enforcement fallout that began when authorities first moved to freeze assets of the former Celsius CEO following fraud charges.

Criminal Case Already Resulted In Prison Sentence

The civil settlement follows a parallel criminal case brought by the U.S. Attorney’s Office for the Southern District of New York.

Federal prosecutors filed criminal charges against Mashinsky on July 11, 2023, two days before the CFTC filed its civil complaint.

The criminal case covered substantially the same conduct described in the regulatory action.

On December 3, 2024, Mashinsky pleaded guilty to one count of commodities fraud and one count of securities fraud. The plea represented one of the most significant criminal convictions arising from the collapse of the crypto lending sector.

In May 2025, the court sentenced him to 12 years in prison. Prosecutors also secured a $50,000 criminal fine and forfeiture totaling more than $48.3 million. FinanceFeeds later reported that the former Celsius CEO began serving his prison sentence in New York, adding to the list of legal consequences tied to the platform’s collapse.

The criminal sentence significantly reduced the practical impact of the latest civil order. Nevertheless, the CFTC’s resolution formally closes the agency’s case against the former executive and secures permanent market bans that will remain in place after completion of any prison term.

The End Of One Of Crypto’s Largest Lending Failures

Celsius became one of the biggest casualties of the crypto market turmoil that unfolded in 2022.

During the industry’s rapid expansion, crypto lending platforms attracted billions of dollars in customer assets by offering yields that often exceeded those available through traditional banking products. Firms including Celsius argued that digital asset lending, staking, and decentralized finance strategies could generate sustainable returns for depositors.

The collapse of crypto asset prices exposed weaknesses in many of those business models.

Several lenders faced liquidity pressures as customer withdrawals accelerated and asset values declined. Celsius eventually froze customer withdrawals before filing for bankruptcy, triggering losses for many users and prompting investigations by multiple regulators.

The firm’s failure became one of several major events that reshaped the regulatory debate around crypto lending, customer asset protections, disclosures, and risk management practices. FinanceFeeds has also covered how crypto lender bankruptcies turn depositors into unsecured creditors, a legal reality that became central to the Celsius recovery process.

The aftermath continued through bankruptcy distributions and related settlements. Earlier this year, Celsius distributed billions to creditors through PayPal and Coinbase, while separate disputes produced recoveries such as Tether’s $299.5 million Celsius bankruptcy settlement.

The CFTC’s final order against Mashinsky closes one of the agency’s highest-profile crypto fraud cases. It also serves as a reminder that enforcement actions launched during the industry’s crisis period continue to work their way through courts long after the underlying market turmoil has faded.