SEC Files Lawsuit Against Celsius and Its Founder Alex Mashinsky

Bloomberg has reported that the U.S. securities regulatory agency has filed a suit against Alex Mashinsky and the Celsius Network in the federal court of Manhattan. No details of the suit have so far been available for sharing, the source says. However, judging by the recent lawsuits set up by the SEC against crypto companies Binance and Coinbase, the accusations will most likely be related to breaking securities law.

U.S SEC SUES CELSIUS NETWORK, ALEX MASHINSKY

— *Walter Bloomberg (@DeItaone) July 13, 2023

Celsius was a major crypto firm that shut down in 2022. It became popular for offering high interest on crypto deposited to its wallets. However, the company’s business shut down after May of last year, when TerraUSD stablecoin crashed along with the LUNA token.

Celsius suffered major losses on its balance sheet and crashed under the pressure of spiked withdrawals made by its customers.

This is not the first lawsuit that has hit Celsius and its founder this year. In January, The Financial Times reported that the company and Mashinsky saw a civil suit filed against them, initiated by the New York attorney general. It accused Mashinsky of “defrauding hundreds of investors” and violating US security laws.

While the company was operating, it offered 17% returns to its clients via its Earn feature. The lawsuit stated that Mashinsky did not register as a salesperson for Celsius, nor did he register as a dealer in commodities and securities operating in New York.