Alex
Mashinsky, the Founder of bankrupt cryptocurrency lender Celsius Network, has
pleaded not guilty to fraud charges imposed on him by the US Department of
Justice (DOJ). Mashinsky
was arrested yesterday (Thursday) in New York after the
DOJ and
several regulators accused him of luring Celsius’ customers by ‘falsely’ portraying the financial health of the business and artificially inflating the
price of the company’s native
token, CEL.
According
to a court document filed yesterday, US Magistrate
Judge Ona Wang has permitted Mashinksy to be released after a $40 million bond, which is to be secured by
a financial claim on his home in New York and brokerage account with the First
Republic Bank, is perfected. The bond
must be first signed by Mashinsky’s wife today and then by another signee by next
Friday.
As part of
the conditions for his release, the ex-Celsius CEO is required to surrender his
travel documents and make no new applications for them. His movement will also be
restricted to southern and eastern districts in New York.
Furthermore,
Mashinsky will be under pre-trial supervision as part of the release
conditions. However, he can leave the districts for a limited period of time,
with the permission of the Assistant United States Attorney and the Pretrial
Services Officer, according to the court document.
CoinDesk, citing Mashinky’s lawyers, reported that the Celsius Founder has rejected the ‘baseless charges’ and will ‘vehemently’ defend himself in court. This is even as the crypto entrepreneur faces multiple charges from the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC).
While the SEC accused Mashinky and his company of raising billions of dollars from investors through ‘unregistered and fraudulent offers and sales of crypto assets securities’, FTC claimed that Celsius ‘misappropriated’ customers’ deposits totalling over $4 billion. On top of that, CFTC said the bankrupt digital asset lender ran a “massive [‘unregistered’] commodity pool scheme involving digital assets commodities.”
Celsius
Network, founded by Mashinsky in 2017, launched into entered the crypto market in 2018 with an
initial coin offering. The company saw massive growth during the crypto boom of
2021, becoming one of the biggest digital asset lenders in the world.
However, troubles started for the firm during last year’s crypto burst that sent several
digital asset businesses, including cryptocurrency exchange giant, FTX, out of business. Celsius in July 2022 filed for bankruptcy, citing
market volatility .
Alex
Mashinsky, the Founder of bankrupt cryptocurrency lender Celsius Network, has
pleaded not guilty to fraud charges imposed on him by the US Department of
Justice (DOJ). Mashinsky
was arrested yesterday (Thursday) in New York after the
DOJ and
several regulators accused him of luring Celsius’ customers by ‘falsely’ portraying the financial health of the business and artificially inflating the
price of the company’s native
token, CEL.
According
to a court document filed yesterday, US Magistrate
Judge Ona Wang has permitted Mashinksy to be released after a $40 million bond, which is to be secured by
a financial claim on his home in New York and brokerage account with the First
Republic Bank, is perfected. The bond
must be first signed by Mashinsky’s wife today and then by another signee by next
Friday.
As part of
the conditions for his release, the ex-Celsius CEO is required to surrender his
travel documents and make no new applications for them. His movement will also be
restricted to southern and eastern districts in New York.
Furthermore,
Mashinsky will be under pre-trial supervision as part of the release
conditions. However, he can leave the districts for a limited period of time,
with the permission of the Assistant United States Attorney and the Pretrial
Services Officer, according to the court document.
CoinDesk, citing Mashinky’s lawyers, reported that the Celsius Founder has rejected the ‘baseless charges’ and will ‘vehemently’ defend himself in court. This is even as the crypto entrepreneur faces multiple charges from the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC).
While the SEC accused Mashinky and his company of raising billions of dollars from investors through ‘unregistered and fraudulent offers and sales of crypto assets securities’, FTC claimed that Celsius ‘misappropriated’ customers’ deposits totalling over $4 billion. On top of that, CFTC said the bankrupt digital asset lender ran a “massive [‘unregistered’] commodity pool scheme involving digital assets commodities.”
Celsius
Network, founded by Mashinsky in 2017, launched into entered the crypto market in 2018 with an
initial coin offering. The company saw massive growth during the crypto boom of
2021, becoming one of the biggest digital asset lenders in the world.
However, troubles started for the firm during last year’s crypto burst that sent several
digital asset businesses, including cryptocurrency exchange giant, FTX, out of business. Celsius in July 2022 filed for bankruptcy, citing
market volatility .