Founder of crypto lender Celsius Network pleads not guilty to fraud charges
Alex Mashinsky, founder and former CEO of bankrupt cryptocurrency lender Celsius Network, pleaded not guilty Thursday to U.S. fraud charges that he misled customers and artificially inflated the value of his company's propriety crypto token. Three federal regulatory agencies also sued Mashinsky and Celsius in connection with the case.
Mashinsky was charged with seven criminal counts — including securities fraud, commodities fraud and wire fraud — according to an indictment unsealed earlier on Thursday. He is one of several crypto moguls to be indicted in another blow for the industry, which is undergoing a reckoning after a slump in crypto prices led to the collapse of several companies, including exchange giant FTX. That company's founder, Sam Bankman-Fried, was charged with fraud last year, and has pleaded not guilty.
Mashinsky, 57, arrived in federal court in Manhattan for his arraignment wearing a gray polo shirt, jeans and no handcuffs. U.S. Magistrate Judge Ona Wang said he would be released on a $40 million bond secured by his Manhattan residence.
«Whether it's old-school fraud or some new-school crypto scheme, it doesn't matter one bit. It's all fraud to us,» U.S. Attorney Damian Williams said at a press conference detailing the charges. 'PROFITS IN YOUR POCKET' Founded in 2017, Celsius filed for Chapter 11 bankruptcy protection in July 2022 after customers rushed to withdraw deposits as crypto prices fell.
Many have been unable to access their funds. Crypto lenders such as Celsius grew rapidly as crypto prices surged during the COVID-19 pandemic. They promised easy loan access and eye-popping interest rates to depositors, then lent out tokens to institutional investors, hoping to profit from the difference.
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