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NEW YORK – Alex Mashinsky, the founder and former CEO of bankrupt crypto finance company Celsius Network, said Thursday that he misled customers into artificially overestimating the value of his proprietary crypto tokens. He pleaded not guilty to US fraud charges for hoisting.

Three federal regulators have also filed charges against Mashinsky and Celsius in connection with the case.

Mashinsky was charged with seven criminal charges, including securities fraud, commodity fraud and wire fraud, according to an indictment released early Thursday.

He is one of several crypto moguls to be indicted in another blow to the crypto industry. The industry is undergoing a liquidation after weak cryptocurrency prices led to the bankruptcy of several companies, including exchange giant FTX. The company’s founder, Sam Bankman-Fried, was indicted on fraud charges last year and pleaded not guilty.

Mashinsky, 57, arrived at federal court in Manhattan for arraignment in a gray polo shirt and jeans and no handcuffs.

U.S. magistrate Judge Ona Wang said he could be released on $40 million (S$50 million) bail secured at his Manhattan home.

“Whether it’s an old-fashioned scam or the latest crypto scheme, it doesn’t matter in the slightest. said in

“Profit in your pocket”

Founded in 2017, Celsius Filing for Chapter 11 Bankruptcy July 2022, after customers rushed to withdraw their deposits after falling cryptocurrency prices. Many people have lost access to their funds.

Crypto financiers such as Celsius have grown rapidly as cryptocurrency prices skyrocketed during the COVID-19 pandemic. They promised depositors easy loan access and amazing interest rates, and then lent the tokens to institutional investors in hopes of profiting from the difference.

Celsius was among the first in a series of bankruptcies in the crypto sector last year as token prices plummeted amid rising interest rates and persistently high inflation. The company filed for bankruptcy shortly after Singapore-based crypto hedge fund Three Arrows Capital and rival crypto finance firm Voyager Digital filed for similar bankruptcy.

Mashinsky and former Celsias Chief Revenue Officer Roni Cohen-Pavon allege the manipulation of the market for the company’s crypto token, known as Cell, as well as a fraudulent scheme to manipulate the price of cryptocurrencies, and allegations related to that manipulation. He was indicted for wire fraud. Tokens, according to the indictment.

Prosecutors allege that Mashinsky personally made approximately US$42 million in proceeds from the sale of Cel tokens held by him. Celsius was not charged.

At a press conference, U.S. Attorney Williams said Cohen Pavon resides abroad and is an Israeli citizen, but declined to comment on whether the former Celsius executive would be extradited.

https://www.straitstimes.com/world/united-states/us-arrests-former-head-of-bankrupt-crypto-platform-celsius Crypto Finance Company Celsius Network Founder Pleads Not Guilty of Fraud

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