Former Celsius CEO Pleads Not Guilty to Charges

  • Celsius was one of the many crypto firms that imploded in 2022.
  • Prosecutors claim Mashinsky earned millions from manipulating the price of the CEL token.
  • Mashinsky has reportedly pleaded not guilty and is set to prove his stance in court.

The Federal Bureau of Investigation (FBI) and the US Attorney for the Southern District of New York have charged the former CEO of the bankrupt cryptocurrency lender Celsius, Alex Mashinsky, with fraud.

The U.S. Justice Department announced in a statement on July 13 that it had charged Mashinsky with wire fraud, commodities fraud, and securities fraud, following reports that he had defrauded clients and misled them concerning Celsius’ “success, profitability, and the nature of the investments” the crypto lender made with user funds.

Damian Williams, the US attorney for the Southern District of New York, said in a statement on Thursday that the indictment was “another significant step in our drive to root out corruption in the crypto economy.”

Williams issued a warning to crypto companies, saying, “If you rip off ordinary investors to line your own pockets, we will hold you accountable. Whether it’s old-school fraud or some new-school crypto scheme, it doesn’t matter one bit. It’s all fraud to us. And we’ll be here to catch it.”

Mashinsky, along with former Celsius chief revenue officer Roni Cohen-Pavon, was charged with manipulating the price of the Celsius token (CEL), raking in millions in the process. Prosecutors claim that Mashinksy made about $42 million in profits from artificially inflating the Celsius token, while Cohen-Pavon earned around $3.6 million.

According to the indictment,

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 criminal allegations coincided with the Commodity Futures Trading Commission’s lawsuit against Celsius and Mashinsky, which was also made public on July 13. The commission claims that Mashinsky and Celsius violated the Commodity Exchange Act by acting as unregistered commodity pool operator and unregistered associated person, respectively.

Mashinsky was reportedly arrested on Thursday, July 13, and was released on a $40 million bond. He also pleaded not guilty to criminal charges and “looks forward to vigorously defending himself in court.”

Lawrence Woriji
Lawrence Woriji Verified Author

I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.

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