Court releases Celsius founder Alex Mashinsky on $40 million bail
Alex Mashinsky, the founder and former CEO of the collapsed crypto lender Celsius Network, entered a plea of not guilty to securities fraud charges. Shortly after his arrest on Thursday, Mashinsky was released on bail by a US District Judge.
Per court documents, the bail amount was set at a substantial $40 million. As part of the bond conditions, which is secured by his residence in Manhattan, Mashinsky’s wife is required to sign it by Friday, July 14. Another individual, who has not been identified yet, is also expected to sign the bond as a financially responsible party before July 21.
Furthermore, the document states that Mashinsky has been 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.
“Mashinsky misrepresented, among other things, the safety of Celsius’s yield-generating activities, Celsius’s profitability, the long-term sustainability of Celsius’ high rewards rates, and the risks associated with depositing crypto assets with Celsius,” prosecutors said in a charging document.
Meanwhile, the collapsed lender agreed to pay $4.7 billion in a settlement with the Federal Trade Commission. Incidentally, the amount coincidentally matches the approximate debt Celsius owes to 1.7 million customers whose funds were frozen when the exchange ceased withdrawals last year.
As part of the settlement, Celsius will be permanently prohibited from engaging in the offering, marketing, or promotion of any product or service that facilitates the deposit, exchange, investment, or withdrawal of assets.
According to the FTC, the settlement amount will not be paid until Celsius returns the remaining customer assets through the ongoing bankruptcy proceedings. To facilitate this, Celsius is anticipated to sell its altcoin holdings or convert them into Bitcoin or Ether, a process that is expected to take place this month.