Celsius (CEL) founder Alex Mashinsky, who was arrested the other day, appeared in court. According to media reports, Mashinsky denied all accusations against him. According to the indictment, the bankrupt crypto boss faces major accusations. Prosecutors claim that Alex Mashinsky committed 7 different crimes, such as securities and commodity fraud.
At the press conference, Attorney General Damian Williams clarified the criminal allegations against the Celsius founder. Attorney General Williams commented that there is no difference between old-school fraud and crypto-related cases.
Mashinsky is not the only person facing charges in the indictment. Prosecutors allege that Celsius’ former chief revenue officer Roni Cohen-Pavon manipulated the local altcoin CEL price. The Celsius founder earned a net income of $42 million by selling his CEL tokens.
However, the defendant’s lawyer, who spoke during the hearing, stated that Cohen-Pavon was an Israeli citizen. It is not yet known whether Pavon will be extradited to the United States.
Government agencies that have sued the sunken crypto debt platform include the SEC and the CFTC. The SEC alleges Celsius has provided customers with misleading information. According to the Securities and Exchange Commission, the startup sent exaggerated promotional emails to potential customers.
The judge handling the case, Ona Wang, said Mashinsky had set the bail. According to Williams, Mashinsky will be prosecuted if he secures $40 million worth of bonds.
Why Did Celsius Go Bankrupt?
As the strong bull market that continued in 2021 inflated the prices of cryptocurrencies, new players entered the sector. Many startups that opened in a positive environment went bankrupt one after the other when bad market conditions occurred.
Leading debt platform Celsius has been guaranteeing investors up to 17% income thanks to high altcoin prices. But the bear market that began with the collapse of LUNA and UST swept away crypto revenues. This is why Celsius is among the largest startups to go bankrupt in 2022.
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