The regulator alleged that Mashinsky and Celsius misled customers about the safety and profitability of the crypto lending platform, which collapsed in 2022. Mashinsky is already serving a 12-year prison sentence after pleading guilty to securities and commodities fraud and has also been permanently barred from working in the crypto and financial sectors by the Federal Trade Commission.
CFTC Permanently Bans Celsius Founder
The US Commodity Futures Trading Commission (CFTC) officially concluded its enforcement action against Celsius Network founder Alex Mashinsky, and secured a permanent ban that prevents him from participating in any markets overseen by the regulator. Under a court-approved consent order that was announced on Thursday, Mashinsky is permanently prohibited from trading commodities, futures, and derivatives in the United States and is also barred from ever registering with the CFTC.
The regulator stated 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. According to the CFTC, 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.
The settlement is the conclusion of one of the regulator’s biggest crypto-related enforcement actions and closes what was the CFTC’s first case involving a digital asset lending platform. The agency alleged that Celsius received approximately $20 billion in customer funds and made risky investments to generate the returns it promised to users.
Mashinsky’s legal troubles extend beyond the CFTC case. In May of 2025, he 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 also 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 now prohibits him from participating in any business involving products or services used to deposit, exchange, invest, or withdraw assets.
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.
Meanwhile, Mashinsky is trying to challenge his criminal sentence. In a filing that was submitted in late May, he asked the court to vacate his 12-year prison term, and argued 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.
