Celsius founder Alex Mashinsky pleads not guilty and is granted a $40M bail after being accused of misleading customers and inflating the CEL token. The case involves allegations of deceptive practices and false claims.
Alex Mashinsky, the founder of Celsius, has entered a plea of not guilty in response to charges accusing him of deceiving customers and artificially inflating the CEL token. Following his arrest on Thursday, a US District Judge granted him bail, setting it at an impressive $40 million. The bond is secured by Mashinsky’s residence in Manhattan, as well as the signatures of his wife and another individual.
Represented by attorneys Benjamin Alee and Jonathan Ohring, Mashinsky expressed his determination to defend himself against what he considers baseless accusations. After confirming his not-guilty plea, he left the court without providing any additional statements.
Under the terms of the bail agreement, Mashinsky will face various restrictions, including a ban on travel and a prohibition on opening new bank or cryptocurrency accounts. Currently, he is only permitted to travel within the Eastern and Southern Districts of New York. The bond itself will be backed by a financial claim on Mashinsky’s bank account and his New York City residence, with his wife required to co-sign.
Multiple Agencies Join Forces: Arrest Of Celsius Founder Alex Mashinsky Leads To Lawsuits and Charges
The arrest and subsequent bail were the result of a joint effort involving several entities, including the Department of Justice, the Federal Trade Commission, and federal securities and commodities regulators. On the same day as his arrest, the Commodity Futures Trading Commission (CFTC), Federal Trade Commission (FTC), and Securities and Exchange Commission (SEC) filed lawsuits against both Celsius and Alex Mashinsky. The Department of Justice also brought forth charges against Mashinsky, including securities and wire fraud, totaling seven counts.
According to prosecutors, Celsius, which filed for bankruptcy in July 2022, allegedly engaged in misleading practices between 2018 and 2022. Mashinsky purportedly marketed Celsius as a secure platform for depositing cryptocurrency assets and earning interest, akin to a modern-day bank. However, the prosecution argues that Celsius operated more like a high-risk investment fund, subjecting customers to a risky business model.
Furthermore, the indictment accuses Mashinsky of leveraging his Twitter account, media interviews, and Celsius’s website to promote the platform. Regulators claim that despite significant losses and withdrawal pressures, Mashinsky and Celsius made false assertions about the platform’s financial stability, leading to a substantial influx of retail investors into its customer base.
In addition to the recent charges, New York Attorney General Letitia James previously filed a lawsuit against Alex Mashinsky in state court. The suit alleges that Mashinsky deceived thousands of investors, including 26,000 New Yorkers. The case is expected to proceed, with Mashinsky steadfast in his determination to prove his innocence in court.