Page 37 - 期货和衍生品行业监管动态（2023年7月刊）

期货和衍生品行业监管动态

In its continuing litigation against Mashinsky, the CFTC seeks restitution,

disgorgement, civil monetary penalties, permanent trading and registration bans, and a

permanent injunction against further violations of the CEA and CFTC regulations, as
charged.

Case Background

The complaint alleges that from 2018 through June 2022, Mashinsky and Celsius

engaged in a scheme to defraud hundreds of thousands of customers by mispresenting

the safety and profitability of its digital asset-based finance platform. Mashinsky and

Celsius, via publicly available videos, blog posts, livestreams, and postings on social

media and their website, touted Celsius as a “safe” alternative for customers’ digital

asset commodities, similar to a traditional bank. Mashinsky and Celsius not only

promised customers their deposited digital asset commodities would be safe with

Celsius, but also promised customers high yield interest payments on the deposits. To

generate income to pay its customers the promised interest rates, customers’ digital

asset commodities were pooled and deployed by Celsius as loans to institutional and

retail customers and for other revenue generating activities, including, but not limited
to, the trading of futures contracts. For this trading, Celsius operated the Celsius Pool,

but was not a registered CPO.

Additionally, Mashinsky did not register as an AP of a CPO, despite soliciting

members of the general public to contribute to the Celsius Pool. Based on the false

promises of the safety of Celsius’ operation and receipt of high interest rate payments,

customers deposited approximately $20 billion with Celsius. However, instead of

engaging in “safe” investments, Mashinsky and Celsius engaged in increasingly risky

trading strategies when they were unable to make customers’ interest payments. Despite

claims by Mashinsky in May 2022 that Celsius had billions of dollars in liquidity and

could meet customer withdrawal requests, on June 12, 2022, Celsius froze customer

withdrawals. On July 13, 2022, Celsius filed for bankruptcy, revealing that its liabilities

exceeded its assets by more than one billion dollars.

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