The Commodity Futures Trading Commission (CFTC) reportedly has in its crosshairs, the now-insolvent cryptocurrency lender Celsius and its erstwhile CEO, Alex Mashinsky, over allegations of breaching several U.S. regulations leading up to the firm’s meltdown.

A July 5th news dispatch from Bloomberg cites unnamed sources stating that the CFTC’s enforcement team has concluded that Celsius failed in its duty of full disclosure to investors, overlooked the need to register with the regulator, and that Mashinsky fell foul of numerous legal stipulations.

If a majority of the CFTC commissioners concur with the examination’s outcomes, legal proceedings in a U.S. federal court against the bankrupt cryptocurrency lending firm could be imminent, as the insiders hinted.

This string of revelations from the CFTC investigators builds on the expanding wave of regulatory repercussions facing the now-inoperative crypto lending service. New York’s Attorney General initiated legal proceedings against Mashinsky on January 5, arguing that the ex-CEO led investors astray, resulting in sizeable monetary losses.

Securities watchdogs from five separate U.S. states triggered an examination into Celsius on June 16 of the prior year, only three days after the firm abruptly ceased allowing user withdrawals on June 13.

In May, court records indicate that the Securities and Exchange Commission (SEC) and federal attorneys from Manhattan started several probes into the firm. Representatives from both the SEC and the U.S. Attorney’s Office for the Southern District of New York have refrained from commenting on the current status of these probes, as mentioned in a Bloomberg report.

At the time of writing, the CFTC and Alex Mashinsky have yet to respond to requests for comment by Cointelegraph.

Adding to the article’s value, it’s essential to remember that while the cryptocurrency industry offers a lot of opportunities for investors, it’s still largely unregulated. This situation often leaves investors exposed to potential fraud and mismanagement. It’s crucial for potential investors to do their due diligence before investing and understand the risk associated with such investments. Governments worldwide are slowly catching up with regulations to protect investors and maintain the integrity of the financial system. This case serves as a reminder of the urgent need for a regulatory framework in the crypto space.