SEC Files Lawsuit Against Celsius Network and Former CEO Alex Mashinsky
Celsius Network, a cryptocurrency lending company that collapsed in 2022, is facing legal action from the US Securities and Exchange Commission (SEC). The SEC has filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky, alleging violations of American laws.
The lawsuit comes on the heels of a recent finding by the Commodity Futures Trading Commission (CFTC) that Celsius and Mashinsky had broken several laws before the company’s collapse last year. Mashinsky has been arrested in New York and is set to be arraigned on Friday, July 14.
According to reports, the SEC’s complaint against Celsius Network and Mashinsky details the alleged violations, although specifics were not immediately available. The investigations by both the SEC and CFTC were launched following Celsius’s announcement of voluntary Chapter 11 proceedings.
New York Attorney General Letitia James previously sued Mashinsky in January 2023, accusing him of making false and misleading statements that led to investors losing billions. Despite the legal challenges, Celsius claims to have $167 million in cash on hand to support certain operations during the restructuring process.
The news of the SEC lawsuit has had a negative impact on Celsius Network’s native token, CEL. The price of CEL has dropped sharply, trading at $0.1543 at press time, down 3.74% in the last 24 hours. The token hit a daily low of $0.1486 following the announcement of the lawsuit, and it remains uncertain if it will fully recover from the recent fall.
Investors and stakeholders will be closely monitoring the developments in the legal proceedings against Celsius Network and Alex Mashinsky as the cryptocurrency industry continues to face regulatory scrutiny.
