US Court Freezes Alex Mashinsky’s Holdings in Criminal Investigation

A federal judge has taken a significant step in the ongoing legal saga involving former Celsius CEO Alex Mashinsky by ordering the freezing of certain bank accounts and properties associated with him. This move comes following a motion filed by the United States Justice Department.

In a recent development disclosed on September 5th, it was revealed that a judge in the U.S. District Court for the Southern District of New York granted a request to unseal a restraining order linked to Mashinsky’s assets. As a result, the Justice Department has been authorized to freeze accounts held under the names of various holding companies at institutions such as Goldman Sachs and Merrill Lynch. Additionally, accounts in the name of Alex Mashinsky at First Republic Securities, SoFi Bank, and SoFi Securities have also been subjected to the freeze.

One notable inclusion in the court order is the freezing of Mashinsky’s property located in Austin, Texas, which he had purchased alongside his wife, Kristine, in 2021. This property had been on the market for over a year, coinciding with the time when Celsius filed for bankruptcy in July 2022.

Mashinsky’s legal troubles have been escalating. He co-founded Celsius, a cryptocurrency lending platform, in 2017 but stepped down as CEO in September 2022, citing his role as an “increasing distraction” amid the financial difficulties faced by users. Prior to this, the company had already come under scrutiny at both the state and federal levels for allegedly offering unregistered securities.

The situation intensified in July when U.S. authorities arrested Mashinsky, accusing him of misleading Celsius investors and defrauding users of billions of dollars. Mashinsky pleaded not guilty to all charges and was released on bail amounting to $40 million, subject to various restrictions, including electronic monitoring and strict limitations on financial transactions exceeding $10,000 without prior approval.

The U.S. Commodity Futures Trading Commission and Securities and Exchange Commission also filed civil cases against Mashinsky in July, ultimately reaching settlements with Celsius amidst the backdrop of the former CEO facing both criminal and civil charges. Furthermore, the Federal Trade Commission imposed substantial fines of $4.7 billion on Celsius, alleging the platform had “duped” its users. However, this judgment was temporarily suspended to allow Celsius to utilize the assets in its bankruptcy proceedings.

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