The U.S. Commodity Futures Trading Commission has secured a final court order against Alexander Mashinsky, the founder and former chief executive of Celsius Network, closing one of the agency’s most prominent crypto enforcement cases. The order, entered by the U.S. District Court for the Southern District of New York on June 18, 2026, imposes permanent trading and registration bans and bars Mashinsky from future violations of anti-fraud provisions under the Commodity Exchange Act.
The regulator said the action resolves its July 2023 lawsuit, which accused Mashinsky and Celsius of fraud and material misrepresentations tied to a digital asset lending platform that attracted billions of dollars from customers.
.@CFTC Resolves Action Against Celsius Founder: https://t.co/lArMbvBJyo
— CFTC (@CFTC) June 18, 2026
A case built on customer losses and false assurances
The original complaint described a business model that pooled customer digital assets and deployed them to generate returns. Celsius promoted weekly interest payments and framed its platform as a safe alternative similar to traditional banking. The CFTC alleged those claims did not reflect reality.
“As companies and individuals develop new products and services utilizing digital asset commodities, they must adhere to the long-established rules prohibiting fraud in the market and comply with the registration requirements of the Commodity Exchange Act,” said Director of Enforcement Ian McGinley in the agency’s 2023 statement.
Court filings stated that from 2018 through June 2022, Mashinsky and Celsius misrepresented safety, profitability, and regulatory compliance. The company collected roughly $20 billion in customer funds during that period. The regulator said Celsius used those funds in risky strategies, including uncollateralized loans and decentralized finance arrangements, while customers received assurances their assets remained secure.
The breakdown became public in June 2022 when Celsius halted withdrawals. A month later, the firm filed for bankruptcy, with liabilities exceeding assets by more than $1 billion. Customers lost access to billions in deposits, with losses later estimated above $5 billion.
Criminal conviction and parallel enforcement actions
The civil case unfolded alongside criminal and regulatory proceedings. Federal prosecutors in the Southern District of New York charged Mashinsky with fraud in July 2023. He later pleaded guilty to commodities fraud and securities fraud in December 2024.
A federal judge sentenced him in May 2025 to 12 years in prison. The sentence included a $50,000 fine and forfeiture of more than $48 million.
Other regulators pursued separate actions. The Securities and Exchange Commission filed its own civil complaint, which remains unresolved. The Federal Trade Commission reached a settlement in 2026 that imposed a permanent ban on Mashinsky’s involvement in crypto-related services and included a multibillion-dollar judgment, most of which remains suspended under certain conditions.
First-of-its-kind crypto lending enforcement
The CFTC described its case against Celsius as its first enforcement action against a digital asset lending platform. The agency emphasized that innovation does not exempt firms from compliance.
The final consent order now bars Mashinsky from trading in commodities, futures, and derivatives markets under CFTC oversight. It also prevents him from registering with the regulator in any capacity.
The agency had already secured a separate consent order against Celsius itself in 2023, which imposed a permanent injunction against the company. That left Mashinsky as the remaining defendant until this latest ruling.
Ongoing legal efforts and creditor recoveries
Despite the resolution of the CFTC case, legal fallout continues. Mashinsky has filed a motion to vacate his prison sentence, citing ineffective counsel and conflicts tied to his legal representation. He also claimed that Sam Bankman-Fried, the former FTX chief executive, influenced the Celsius token in ways that harmed the company. A court has ordered prosecutors to respond to that request by mid-August.
Meanwhile, bankruptcy proceedings have produced partial recoveries for creditors. Distributions have returned a significant portion of claims, though not full restitution. The CFTC has cautioned that repayment orders do not guarantee recovery, as wrongdoers may lack sufficient assets.
Regulatory message to the crypto market
The case stands as a defining enforcement moment for digital asset platforms that offer yield-based products. The CFTC has reiterated that firms must register where required and avoid misleading claims about risk and returns.
The agency has also urged customers to verify registration status through official databases before committing funds. It continues to encourage whistleblowers and tip submissions related to potential violations of commodity trading laws.
With the final order in place, the Celsius case closes a major chapter in the regulatory response to the 2022 crypto market crisis. Other proceedings tied to Mashinsky and similar platforms remain active, as authorities continue to address misconduct linked to the sector’s rapid expansion.
Tanya Petrusenko
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