Celsius CEO absent from $4.7B FTC settlement

The Federal Trade Commission announced the settlement after the FTC, CFTC and SEC filed lawsuits against Celsius

article-image

DCStockPhotography/Shutterstock modified by Blockworks

share

In a move designed to prevent Celsius from engaging in business practices linked to crypto assets, the FTC reached an agreement with the bankrupt lender that would return an eye-popping $4.7 billion to customers.

No monetary fines were imposed directly on the company by the FTC — as is typical in such settlements — with the regulator evidently preferring to try to make Celsius customers whole. The $4.7 billion judgment against Celsius came with a number of conditions attached, including that the bankrupt company cannot restart its operations. 

The settlement was “suspended” under the FTC judgment in a bid permitting Celsius to return remaining assets to its former users.

The settlement does not apply to former Celsius executives, including former CEO Alex Mashinsky, as well as co-founders Shlomi Daniel Leon and Hanoch Goldstein. The executive trio, the FTC said, did not reach a settlement with the regulator and would face federal court proceedings as a result. 

The proposed settlement with Celsius would prevent the bankrupt lender from operating what appeared to be all of its business lines, including offering or distributing crypto-linked assets, as well as facilitating deposit and withdrawals. 

Under a lawsuit that preceded the settlement, the FTC said Celsius, including employees and attorneys, was prohibited from obtaining customer information with false information. 

The FTC filed a lawsuit against Celsius and former executives in New York on Thursday, alleging deceptive practices by the company and its leadership.

Celsius “deceived users by falsely promising them that they could withdraw their deposits at any time, that the company maintained a $750 million insurance policy for deposits, that it had sufficient reserves to meet customer obligations,” the regulator said, adding that the company lacked the reserves to do so. 

The allegations also state the bankrupt lender “routinely” made unsecured or under-collateralized loans — despite Celsius stating it did not do so as a business practice. 

The FTC joined the CFTC and SEC in suing Mashinsky and Celsius. The DOJ has also unsealed an indictment against Mashinsky.

Celsius filed for bankruptcy last July after the algorithmic stablecoin TerraUSD collapsed.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?