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Former Celsius Network CEO Alex Mashinsky was arrested and charged on Thursday with securities fraud and wire fraud, among other offenses, according to Reuters:
“Mashinsky, 57, arrived in Manhattan federal court for his arraignment wearing a gray polo shirt, jeans, and no handcuffs.”
Mashinsky pleaded not guilty to all charges and was released on $40 million bond. The arrest follows a series of lawsuits filed against Celsius and Mashinsky by the CFTC, FTC and SEC.
Prior to the arrest, New York State got him first when New York Attorney General Letitia James sued him in state court, accusing him of misleading thousands investors in the state.
US Magistrate Judge Ona Wang approved Mashinsky’s bond, backed by his Manhattan residency and the signatures of his wife and another party. His travels were limited to the Eastern and Southern Districts of New York.
Mashinsky’s attorneys, Benjamin Alee and Jonathan Ohring, have yet to publicly comment on the case. However, they said in a statement to CoinDesk that “he looks forward to vigorously defending himself in court against these baseless accusations.”
Celsius, which declared bankruptcy in 2022 following a rapid drop in crypto prices and a flurry of withdrawal requests from customers, is under intense scrutiny. Prosecutors allege that Mashinsky, from 2018 to 2022, deliberately lead into error investors on key aspects of Celsius’ operations:
“(Mashinsky) orchestrated a scheme to defraud customers of Celsius Network LLC and its related entities.”
The charges center on the company’s interest program, which promised high yields of up to 17% and presented the platform as a safe haven similar to a modern bank. These claims, prosecutors say, stand in stark contrast to the platform’s allegedly high-risk strategies.
Mashinsky and Celsius have yet to change their stance on the platform’s financial stability, according to the SEC.
