Celsius Network Faces Lawsuits and Co-Founder Arrested for Fraud, U.S. Regulators Crack Down on Crypto Industry

A Bitcoin covered in black crystals.

Celsius Network, a now-bankrupt crypto lending firm, and its former CEO and co-founder Alex Mashinsky are facing multiple lawsuits from three separate American entities: the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC). The U.S. District Court for the Southern District of New York has charged Mashinsky and Celsius’ chief revenue officer, Roni Cohen-Pavon, with orchestrating a scheme to defraud customers of Celsius Network.

These lawsuits come at a time when U.S. regulatory agencies are cracking down on the crypto industry. In recent weeks, the U.S. government accused a cybersecurity professional of hacking a cryptocurrency exchange and stealing around $9 million in cryptocurrency. The SEC also sued two of the largest crypto exchanges, Binance and Coinbase, for separate violations of securities laws. Additionally, the U.S. Department of Justice charged two Russian nationals for hacking and causing the collapse of Mt. Gox, once one of the largest crypto exchanges.

This series of charges and suits reflects increased scrutiny of the crypto industry by U.S. regulators. Celsius Network and Mashinsky face significant legal challenges, which may be just the beginning as regulators continue to closely monitor the industry.

In other news related to web3 technology:

  • Ripple’s XRP token has been ruled as security in certain cases by a federal court.

  • Google Play has changed its policy towards blockchain-based apps, opening opportunities for tokenized digital assets like NFTs.

  • Coinbase Wallet has launched a messaging feature that enables users to interact directly on its platform.

  • Car-sharing revenue is seen as a potential first step towards mainstream adoption of web3 technology in enterprises.

  • Web3 games can succeed without highlighting blockchain elements prominently.