The Commodity Futures Trading Commission (CFTC) has found that the now-defunct crypto lender Celsius Network (CRYPTO: CEL) and its previous CEO, Alex Mashinsky, violated U.S. regulations prior to the company's collapse.

If the CFTC's commissioners concur with these findings, a lawsuit could be filed in federal court within the month, Bloomberg reported, quoting anonymous sources.

The enforcement team at the CFTC has reportedly determined that Celsius misled its investors and should have registered with the regulatory body, and that Mashinsky also breached regulations.

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Legal action has already been taken against Celsius and Mashinsky, including a lawsuit from New York Attorney General Letitia James alleging that Mashinsky made false statements about the safety of the crypto platform and misrepresented the declining financial condition of the company.

Mashinsky has attempted to dismiss the New York state claim, arguing that the suit “demonstrates a fundamental misunderstanding of Celsius’s business and Mashinsky’s role therein.”

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