Founder of crypto lender Celsius Network Alex Mashinsky arrested, charged with fraud

economictimes.indiatimes.com:

Mashinsky, the founder and former CEO of bankrupt cryptocurrency lender Celsius Network, was arrested and charged with fraud, a US prosecutor in New York said Thursday morning, as three federal regulatory agencies sued him and his company. Mashinsky, 57, was charged with seven criminal counts — including securities fraud, commodities fraud and wire fraud — while Celsius' former chief revenue officer, Roni Cohen-Pavon, was charged with four criminal counts, according to the indictment, which was unsealed on Thursday.

Lawyers for Mashinsky and Celsius did not immediately respond to requests for comment, and Cohen-Pavon's attorney could not immediately be reached. The US Attorney's Office in Manhattan said it would hold a press conference at 11:30 a.m.

ET (1530 GMT) to provide details on the charges against Mashinsky and Cohen-Pavon. Mashinsky and Cohen-Pavon were charged with market manipulation of the Hoboken, New Jersey-based company's crypto token, known as Cel, as well as a fraudulent scheme to manipulate the price of the cryptocurrency and wire fraud related to the manipulation of the token, according to the indictment.

In a related development, the US Securities and Exchange Commission sued Mashinsky and Celsius on Thursday, according to a court filing, alleging he and Celsius raised billions of dollars through the sale of unregistered crypto asset securities and misled investors about the financial success of the company. The US Commodity Futures Trading Commission and the Federal Trade Commission also filed lawsuits against Celsius and Mashinsky.

The FTC said it had reached a settlement with Celsius that will permanently ban it from handling customers' assets. The regulators accused Mashinsky and his company of