Celsius co-founder and former CEO Alex Mashinsky was arrested on Thursday after an investigation into the bankrupt lender’s collapse.

Alex Mashinsky, co-founder and former CEO of the insolvent cryptocurrency lender Celsius Network was arrested on Thursday according to a US Department of Justice (DOJ) indictment.

Mashinsky and others have been charged with seven counts, including securities, commodities, and wire fraud, and a conspiracy charge to manipulate $CEL, Celsius’ native token, Bloomberg reports.

SEC, CFTC, and FTC File Lawsuits Against Mashinsky

The DOJ’s indictment is accompanied by separate lawsuits by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Federal Trade Commission (FTC) against the company and Mashinsky.

Celsius filed for Chapter 11 bankruptcy in July 2022, and the Fahrenheit consortium recently won a bid to acquire the lender’s assets.

DOJ: Mashinsky Misled Investors for Years

The Department of Justice accused Mashinsky and Celsius’ Chief Revenue Officer Roni Cohen-Pavon of running “a years-long scheme to mislead customers” on Celsius’ market value and its interest in CEL.

Bloomberg reports the DOJ indictment further accused Mashinsky of making false and misleading public statements regarding his own sales of CEL.

The DOJ indictment reads:

Mashinsky portrayed Celsius as a modern-day bank, where customers could safely deposit crypto assets and earn interest. In truth, however, Mashinsky operated Celsius as a risky investment fund, taking in customer money under false and misleading pretences.

CFTC Alleges a Fraud Scheme

The Commodity Futures Trading Commission (CFTC) accused Mashinsky and Celsius of participating in a “scheme to defraud hundreds of thousands of customers by misrepresenting the safety and profitability of its digita

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Author: Jana Serfontein

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