The founder and former CEO of the bankrupt cryptocurrency lender Celsius Network, Alex Mashinsky, has been arrested and charged with fraud. This grave accusation has sent shockwaves through the crypto community, further eroding trust in the industry. Three federal regulatory agencies have also filed lawsuits against Mashinsky and his company, intensifying the legal battle.
The charges against Mashinsky, 57, include seven criminal counts such as securities fraud, commodities fraud, and wire fraud. His arrest coincided with the bankrupt company’s agreement to pay a $4.7 billion settlement with government regulators, after the SEC and CFTC charged the exchange with a scheme to defraud investors out of billions. The unsealed indictment also reveals that Roni Cohen-Pavon, the former chief revenue officer of Celsius Network, faces four criminal counts.
Prosecutors and federal regulators allege that Mashinsky deliberately misled customers and artificially inflated the value of his company’s proprietary crypto token, casting doubt on the credibility of the crypto lending industry.
Today we charged Celsius and its Alex Mashinsky with fraud and the unregistered offer and sale of securities.
https://t.co/BoulI5RzVh pic.twitter.com/E9ygRtwC7g— U.S. Securities and Exchange Commission (@SECGov) July 13, 2023
Lawyers for Mashinsky and Celsius have not yet commented on the charges, while Cohen-Pavon’s attorney remains unreachable. The arrest of Mashinsky adds to the growing list of prominent crypto figures facing legal troubles, signifying a reckoning for an industry struggling with price slumps and collapses of major companies.
As the legal proceedings unfold, the fate of Mashinsky and Celsius Network hangs in the balance, leaving investors and the crypto community anxiously awaiting the outcome while questioning the future of the industry’s integrity.
