Alex Mashinsky, a former chief executive of Celsius Network Ltd, was charged by US prosecutors with inflating the price of the company’s cryptocurrency to draw users to the network.
Former Celsius CEO Alex Mashinsky Arrested, His Bail $40 Million
Prosecutors claim that Mashinsky, who was detained and charged with wire fraud and other offenses, ran a multi-year conspiracy to deceive clients before Celsius folded last year with more than $1 billion in debt. On the other hand, at a hearing on Thursday in New York, Mashinsky entered a not-guilty plea.
Mashinsky Arrested
Alex Mashinsky, the former CEO of the now-collapse cryptocurrency lender Celsius, was reportedly detained on July 13’s morning. Moments earlier, on the same day, the US Securities and Exchange Commission had started legal action against the crypto lender.
According to Bloomberg, which cited people familiar with the situation, the former CEO was reportedly detained following an investigation into the company’s demise. Mashinsky was charged by the US Department of Justice with fraud and market manipulation.
Mashinsky portrayed Celsius as a modern-day bank, where customers could safely deposit crypto assets and earn interest. In truth, however, Mashinsky operated Celsius as a risky investment fund, taking in customer money under false and misleading pretenses.
The Indictment
Mashinsky’s Bail Set at $40 Million
A U.S. District Judge has set bail for Mashinsky, the founder and former CEO of the insolvent cryptocurrency lender Celsius, at $40 million after his arrest on fraud-related charges on Thursday. Following his arrest, Mashinsky entered a not-guilty plea to seven counts of deceiving investors and manipulating the price of his CEL cryptocurrency, according to the court document.
As part of the agreement, Mashinsky will be prohibited from traveling and from opening any new bank or cryptocurrency accounts. According to court documents, his wife will sign the bond while the other co-signer is still to be named. A financial claim on his New York City house and bank account will also serve as collateral for the bond.
Celsius Filed for Bankruptcy Last Year
On July 14 of the previous year, Celsius Network declared bankruptcy. Mashinsky was recently found guilty by the Commodity Futures Trading Commission’s investigators, who concluded that the former CEO had broken several American laws prior to the collapse of the business in 2022.
After filing a lawsuit against Mashinsky on January 5, the investigation against the former CEO got underway. The previous CEO allegedly misled investors and resulted in billion-dollar losses, according to the NYAG.
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