The United States Attorney’s Office for the Southern District of New York, along with the Federal Bureau of Investigation, has announced fraud charges against Alex Mashinsky, the former CEO of bankrupt crypto lender Celsius. The charges include securities fraud, commodities fraud, and wire fraud, all related to defrauding customers and providing misleading information about the platform’s success, profitability, and investment activities.
While Celsius has entered into a “non-prosecution agreement” with authorities, accepting responsibility for its role in the fraudulent schemes, Alex Mashinsky will face criminal charges individually. This indicates that if individuals exploit ordinary investors for personal gain, they will be held accountable regardless of whether it involves traditional fraud or cryptocurrency-related schemes.
Additionally, former Celsius chief revenue officer Roni Cohen-Pavon will also face charges, including conspiracy, securities fraud, market manipulation, and wire fraud. These charges are associated with the alleged manipulation of the CEL token’s price. Mashinsky was reportedly arrested on July 13 as part of the indictment.
These charges come amidst a series of legal actions against Celsius and Mashinsky following the platform’s collapse and financial difficulties in 2022. Celsius had suspended withdrawals, and numerous state securities regulators were already investigating the company.
The New York Attorney General’s office filed a lawsuit against Mashinsky on January 5, accusing him of misleading Celsius investors, leading to significant financial losses. On July 13, the U.S. Securities and Exchange Commission (SEC) also brought a lawsuit against Celsius and Mashinsky, alleging similar wrongdoing and charging the firm with securities law violations.
It is important to note that this is an ongoing story, and further details will be provided as they become available.