Celsius Network's Alex Mashinsky Arrested as U.S. Authorities Sue Bankrupt Crypto Lender
The former CEO of bankrupt crypto lender Celsius Network Ltd., Alex Mashinsky, has been charged with fraud by the U.S. Department of Justice (DoJ) and sued by three regulatory agencies over the company's collapse.
Apart from the DoJ, Celsius and Mashinsky are also facing a barrage of lawsuits and allegations from various U.S. agencies, including the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC).
In January 2023, Letitia James, the New York Attorney General, filed a lawsuit against Mashinsky, the platform's founder.
The lawsuit alleged that Mashinsky had misled investors regarding the company's financial well-being before the bankruptcy filing.
Mashinsky vehemently denied these claims, referring them as "baseless" and attributing them to online misinformation.
Mashinsky and several others are facing multiple charges filed by the Department of Justice (DoJ), which include securities fraud, commodities fraud, wire fraud, and conspiracy.
The DoJ claims that Mashinsky and Celsius Chief Revenue Officer Roni Cohen-Pavon engaged in a long-term scheme to deceive customers regarding the actual market value of the company and their interest in CEL.
Furthermore, the DoJ alleges that the marketing materials employed by the firm portrayed Celsius as a "modern-day bank."
However, according to the DoJ's accusations, Mashinsky operated Celsius as a high-risk investment fund, misleading customers and luring them into becoming unwitting investors in a far riskier and less profitable business than it was portrayed to be.
On the same day, the Securities and Exchange Commission (SEC) filed a lawsuit against Celsius and its founder, Mashinsky, alleging
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