Former Celsius CEO Alex Mashinsky Arrested Amidst Legal Troubles

Reports have emerged stating that Alex Mashinsky, the former CEO of defunct cryptocurrency lender Celsius, was arrested on the morning of July 13. This development occurred shortly after the United States Securities and Exchange Commission (SEC) filed a lawsuit against Celsius Network on the same day.

According to sources familiar with the matter, Mashinsky’s arrest followed an investigation into the collapse of Celsius, as reported by Bloomberg. The US Department of Justice reportedly indicted Mashinsky on charges of fraud and market manipulation.

Celsius Network filed for bankruptcy on July 14 of the previous year. Recently, investigators from the Commodity Futures Trading Commission (CFTC) found Mashinsky guilty of violating multiple US regulations leading up to the company’s downfall in 2022.

The investigation into the former CEO was initiated after the New York Attorney General (NYAG) sued Mashinsky on January 5. The NYAG alleged that he had misled investors, resulting in significant financial losses.

Celsius and Mashinsky faced mounting troubles starting in June of the previous year when the lending platform abruptly halted withdrawals. Subsequently, securities regulators from five US states launched an investigation into Celsius on June 16, 2022, and within a month, the company filed for bankruptcy.

While Celsius was affected by the broader cryptocurrency market downturn, which witnessed the collapse of the Terra-Luna ecosystem and the hedge fund Three Arrow Capital, a CFTC investigation revealed that Celsius and Mashinsky had violated various banking laws and deceived their customer base.

In 2021, during the cryptocurrency bull run, the Celsius lending platform gained popularity, offering attractive interest rates on cryptocurrency deposits, some of which were in the double digits. Mashinsky often marketed these products as safer alternatives to traditional banking offerings. However, the downfall of Terra’s algorithmic stablecoin UST and a decline in the cryptocurrency market had detrimental effects on Celsius’ business.

The arrest of Mashinsky and the SEC’s lawsuit against Celsius follow similar legal actions taken against prominent cryptocurrency exchanges Binance and Coinbase in recent months.

As of now, Celsius Network has not responded to requests for comment from CryptoGrafos.

For more news, find me on Twitter or subscribe to my YouTube channel.

What is your opinion on this issue? Leave me your comment below! I’m always interested in your opinion!

Leave a Reply

Your email address will not be published. Required fields are marked *

Recommended for you