Alex Mashinsky, the Founder of the 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.
Alex Mashinsky’s Bail Tied to $40M Bond
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 secured. 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 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 district 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', the FTC claimed that Celsius 'misappropriated' customers' deposits totalling over $4 billion. On top of that, the CFTC said that the bankrupt digital asset lender ran a “massive [‘unregistered’] commodity pool scheme involving digital assets commodities."
Celsius Network, founded by Mashinsky in 2017, 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, trouble started for the firm during last year’s crypto bubble 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.
This article was written by Solomon Oladipupo at www.financemagnates.com.
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