Former Celsius CEO Alex Mashinsky to Face Criminal Trial for Fraud
The former CEO of Celsius, Alex Mashinsky, is set to face a criminal trial on September 17, 2024, following allegations of defrauding customers and misleading them about the financial health of the crypto lender. Celsius declared bankruptcy last year and now owes billions to its investors. Mashinsky and Celsius were accused of inflating the price of the company’s native token using customer funds and deceiving their clientele. The chief revenue officer at Celsius, Roni Cohen-Pavon, has also faced criminal charges and entered a guilty plea last month.
Mashinsky Faces SEC and CFTC Charges
The Securities and Exchange Commission (SEC) filed a lawsuit against Celsius and its former CEO for raising money through deceitful and unregistered sales of “crypto-asset securities.” The SEC also accused them of lying to investors about Celsius’s financial situation and manipulating the price of its native token. Additionally, the Commodity Futures Trading Commission (CFTC) brought fraud charges against Mashinsky and the company. As a result, some of Mashinsky’s assets have been frozen, including his Texas home and funds at institutions like Goldman Sachs, Merrill Lynch, and SoFi Bank.
Celsius Creditors Approve New Payment Plan
Creditors of Celsius have approved a reorganization strategy that ensures they will receive payments in prominent cryptocurrencies like Bitcoin and Ethereum. They will also receive equity in a new corporate entity called “NewCo.” However, there were concerns among some creditors about accepting shares in an unfamiliar venture, as well as demands for the restitution of CEL tokens, Celsius’s native cryptocurrency.
Hot Take: Former Celsius CEO Alex Mashinsky to Face Criminal Trial for Alleged Fraud
Former Celsius CEO Alex Mashinsky is facing a criminal trial for defrauding customers and misleading them about the financial health of the crypto lender. Mashinsky’s alleged actions, including inflating the price of Celsius’s native token using customer funds, have led to legal battles with both the SEC and CFTC. Despite this, creditors of Celsius have approved a payment plan that will provide them with payments in cryptocurrencies and equity in a new corporate entity. However, there are concerns among some creditors about accepting shares in an unfamiliar venture.
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