WASHINGTON — The Commodity Futures Trading Commission today announced the U.S. District Court for the Southern District of New York entered a consent order that resolves the CFTC’s 2023 enforcement action against Alexander Mashinsky, the founder and former CEO of Celsius Network LLC. [See CFTC Press Release No. 8749-23]. The consent order permanently enjoins Mashinsky from further violations of certain anti-fraud provisions in the CEA and CFTC regulations and imposes permanent trading and registration bans against him.

On July 13, 2023, the CFTC filed a complaint against Celsius and Mashinsky in the U.S. District Court for the Southern District of New York. The complaint alleged Celsius was an online platform on which Celsius’ customers would allow Celsius to pool their digital assets and deploy these pooled assets to generate revenue for Celsius, which purportedly would be returned to the customers in the form of weekly interest payments or ‘rewards’. 

The complaint alleged that beginning in 2018 and continuing through at least June 2022, Mashinsky and Celsius engaged in a scheme to defraud hundreds of thousands of customers by mispresenting the safety, profitability, and regulatory compliance of Celsius’ digital asset-based finance platform. The complaint alleged Mashinsky, via publicly available videos, blog posts, livestreams and postings on social media and the Celsius website, touted Celsius as a “safe” alternative akin to a traditional bank for customers’ digital assets while simultaneously promising customers high yield interest payments on their deposits. 

The complaint alleged, to meet the returns promised to its customers, Celsius engaged in increasingly risky investment strategies, including extending millions of dollars in uncollateralized loans and unregulated, risky decentralized finance agreements. The complaint alleged, while continuing to tell its customers their assets were safe and earning rewards, Celsius suffered devasting losses. In fact, customer funds were not at all secure and Celsius eventually filed for bankruptcy. In total, Celsius received funds totaling approximately $20 billion in value. On July 17, 2023, the court entered a consent order of permanent injunction against Celsius, leaving Mashinsky as the only remaining defendant. 

On July 11, 2023, the U.S. Attorney’s Office for the Southern District of New York filed a parallel criminal action against Mashinsky in connection with the same conduct at issue in the CFTC’s action. USA v. Alexander Mashinsky, No. 1:23-cr-00347-JGK (S.D.N.Y. July 11, 2023). On Dec. 3, 2024, Mashinsky pled guilty to one count of commodities fraud and one count of securities fraud. On May 8, 2025, Mashinsky was sentenced to 12 years in prison and ordered to pay a $50,000 fine and forfeiture of $48,393,446 for committing commodities fraud and securities fraud at Celsius.