SEC is suing Celsius Network and CEO Alex Mashinsky for fraud and securities violations

SEC is suing Celsius Network and CEO Alex Mashinsky for fraud and securities violations

The SEC (US Securities and Exchange Commission) has filed a lawsuit against crypto lender Celsius Network and its former CEO, Alex Mashinsky. The two are accused of participating in four counts of fraud and one count of securities violations.

Before the collapse last summer, Celsius Network offered users high interest rates on deposits in unused cryptocurrencies through its “Earn Interest Program.” The program was promoted as a safe investment with a high return.

The SEC now alleges that Celsius and Mashinsky misrepresented Celsius' core business model. They are said to have stated that the company does not issue unsecured loans, does not engage in risky transactions and that the interest paid to investors represents 80% of the interest rate. According to the indictment, these claims were false and were withheld from investors before Celsius filed for bankruptcy in July 2022.

The SEC is now demanding that Mashinsky be prohibited from purchasing, offering, or selling cryptocurrencies and that he must repay any ill-gotten gains in the form of benefits resulting from the alleged illegal conduct. Civil penalties should also be established.

The CFTC (US Commodity Futures Trading Commission) is also considering action against Mashinsky, accusing him of misleading investors. It is also argued that he should have registered with the regulator.

The New York Attorney General's Office filed suit against Celsius and Mashinsky back in January. Among other things, they are accused of misrepresenting and concealing the company's financial situation.

Neither Celsius nor Mashinsky have yet responded to the allegations.

The story remains current and will be updated shortly.

Note: This article is based solely on the information contained in the court file and does not contain any made-up details.