Celsius’ Founder Alex Mashinsky Pleads Not Responsible, Bail Set at $40M

To Fraud Charges, Alex Mashinsky Pleads Not Guilty

In regards to fraud charges brought against him by the US Department of Justice (DOJ), Alex Mashinsky, founder of the defunct cryptocurrency lending platform Celsius Community, has entered a not guilty plea. To attract customers, the DOJ and many regulators claim Mashinsky ‘falsely’ portrayed Celsius’ financial health and fraudulently inflated the value of the company’s native token, CEL. He was arrested in New York on Thursday.

After the perfection of a $40 million bond, which is to be secured by a financial claim on Mashinksy’s New York home and brokerage account at the First Republic Bank, he will be released from custody, as stated in a court document filed yesterday. Mashinsky’s husband must sign the bond today, and another signatory must do so by next Friday.

The former CEO of Celsius is forced, as part of the terms of his release, to turn over all of his passports and travel documents and to refrain from applying for any more. It’s possible that he’ll only be able to go around the eastern and southern parts of the city.

Mashinsky will also be subject to pre-trial supervision as part of the terms of his release. Nevertheless, he can depart the districts for a restricted time period, with the approval of the Assistant United States Legal professional and the Pretrial Companies Officer, in accordance with the courtroom doc.

CoinDesk, citing Mashinky’s attorneys, said that the Celsius Founder has refused the ‘baseless fees’ and can ‘vehemently’ defend himself in courtroom. That’s because the crypto entrepreneur has to pay a variety of fees to several government agencies, such as the US Securities and Trade Commission, the CFTC, and the FTC.

The Securities and Exchange Commission (SEC) charged Mashinky and his company with “unregistered and fraudulent offers and sales of crypto assets securities,” which they say raised billions of dollars from investors.
The FTC said that Celsius’misappropriated’ approximately $4 billion in deposits from potential investors.
Financial Crimes Enforcement Network said defunct digital asset lender operated “huge [‘unregistered’] commodity pool scheme involving digital belongings commodities.”

Mashinsky’s Celsius Community, which he founded in 2017, made its debut on the cryptocurrency market in 2018 with an initial coin offering. During 2021’s crypto boom, the company experienced rapid expansion, allowing it to become one of the world’s leading digital asset lenders. However, problems began for the company during last year’s crypto explosion, which wiped out a number of digital asset companies, including the cryptocurrency exchange giant FTX.

Celsius filed for bankruptcy protection in July 2022, alleging “market volatility.”