U.S. Prosecutors Oppose Dismissal of Charges Against Former Celsius CEO
Prosecutors in the United States have responded to former Celsius CEO Alex Mashinsky’s motion to dismiss two criminal charges brought against him. They argue that the charges, which include commodities fraud and market manipulation, demonstrate Mashinsky’s intent to deceive investors about the profitability and practices of his crypto platform, as well as manipulate the market for Celsius’ CEL token.
Celsius Bankruptcy and Allegations
Celsius filed for bankruptcy in July 2022, following allegations that Mashinsky misled investors and manipulated the crypto market to benefit from inflated token prices. These actions resulted in halted customer withdrawals and the subsequent bankruptcy filing.
Mashinsky’s Challenge
Mashinsky sought to dismiss the charges by arguing that treating Celsius’ Earn Program as both a security and a commodity is contradictory and legally unsupported. He also criticized the lack of clarity regarding whether cryptocurrencies are classified as commodities or securities. Furthermore, Mashinsky questioned the fair notice regarding the alleged market manipulation charge, claiming insufficient legal precedent.
Prosecutors’ Response
Prosecutors challenged Mashinsky’s assertions, maintaining that the charges should not be dismissed due to lack of fair notice. They argued that his actions violated statutes prohibiting deceptive practices and were contrary to a fair market. Prosecutors also contended that references to Celsius’ bankruptcy are relevant to demonstrate the result of Mashinsky’s alleged fraudulent conduct.
Advancement of AG’s Celsius Case
In a separate civil lawsuit initiated by New York Attorney General Letitia James, Manhattan state court justice rejected Mashinsky’s attempt to dismiss fraud allegations. The court found sufficient evidence suggesting that Mashinsky’s statements misled Celsius backers about investment security and risks. James seeks significant penalties and restrictions on Mashinsky’s future executive roles and securities-related activities in New York.
Hot Take: Prosecutors Oppose Dismissal of Charges Against Former Celsius CEO
U.S. prosecutors have countered Alex Mashinsky’s motion to dismiss criminal charges against him, arguing that the charges demonstrate his intention to deceive investors and manipulate the market. Mashinsky’s challenge rests on the contradiction of treating Celsius’ Earn Program as both a security and a commodity, as well as the lack of clarity regarding cryptocurrency classification. However, prosecutors maintain that sufficient evidence exists to proceed with the case, rejecting claims of legal ambiguity. The advancement of the civil lawsuit by New York Attorney General Letitia James further strengthens the case against Mashinsky, potentially resulting in significant penalties and restrictions on his future activities.
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