Court freezes assets of Ex-Celsius CEO on fraud charges

abdelaziz Fathi

The US Department of Justice (DOJ) has moved to freeze the assets of Alex Mashinsky, the founder and former CEO of the collapsed crypto lender Celsius Network. Mashinsky is currently facing seven criminal charges related to cryptocurrency fraud.

In a recent court ruling, the judge ordered that Mashinsky’s bank accounts be frozen across several financial institutions, including major names like Goldman Sachs, Merrill Lynch, First Republic Securities, SoFi Bank, and SoFi Securities. Furthermore, this freeze extends to a property situated in Texas, co-owned by Mashinsky and his spouse, Kristine.

Celsius Network, which was once a prominent player in the world of cryptocurrency lending, encountered severe financial woes and eventually filed for bankruptcy in 2022. This bankruptcy filing brought to light large financial liabilities that exceeded the platform’s assets by a staggering $1.2 billion.

Back in July, the Securities and Exchange Commission (SEC) launched a lawsuit against Celsius and its former CEO. The lawsuit accuses them of engaging in fraudulent and unregistered sales of “crypto asset securities,” disseminating false information to investors about Celsius’s financial stability, and manipulating the price of CEL, the native token of the platform.

Shortly after his arrest, Mashinsky entered a plea of not guilty to securities fraud charges and was then released on bail by a US District Judge.

Per court documents, the bail amount was set at a substantial $40 million and is secured by his residence in Manhattan. Furthermore, Mashinsky was instructed to surrender his travel documents to the authorities. His travel will be limited to the New York area, and he is prohibited from opening any new financial, business, or personal bank accounts, lines of credit, or cryptocurrency accounts without prior approval. These restrictions and conditions are intended to regulate Mashinsky’s movements and financial activities during the legal proceedings, the court says.

During a hearing at the Manhattan federal court, Alex Mashinsky pleaded not guilty to multiple charges, including securities, commodities, and wire fraud, as well as manipulating the price of CEL tokens. Celsius’ chief risk officer, Roni Cohen-Pavon, is also facing the same charges. If found guilty, both executives could face lengthy prison sentences, spanning several decades.

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