Former Celsius CEO Alex Mashinsky Seeks Dismissal of FTC Fraud Charges
The former CEO of cryptocurrency lending company Celsius, Alex Mashinsky, has requested a US court to dismiss the fraud charges brought against him by the Federal Trade Commission (FTC). Mashinsky and Celsius’ former chief revenue officer, Roni Cohen-Pavon, were arrested in July and faced criminal and civil charges from multiple regulatory bodies including the FTC, Department of Justice (DOJ), Securities and Exchange Commission (SEC), and Commodities Futures Trading Commission (CFTC).
Accusations of Deception and Market Manipulation
The FTC accused Mashinsky of deceiving customers by falsely assuring them that their cryptocurrency deposits would be safe and always accessible. Additionally, he and Cohen-Pavon are alleged to have manipulated the price of Celsius’ native token, CEL, leading traders to purchase it at an inflated price for their own financial gain.
Celsius’ Bankruptcy and Asset Seizure
Celsius froze customer withdrawals in June 2022 due to extreme market conditions and subsequently filed for bankruptcy. A court order revealed that several bank accounts and a Texas home owned by Mashinsky have been seized by the DOJ.
Defense Arguments
Mashinsky’s lawyers argue that the allegations do not support a claim of fraudulent obtainment of customer information from a financial institution under the Gramm-Leach-Bliley Act, which is required to establish liability.
Hot Take: Former Celsius CEO Challenges FTC Charges
Alex Mashinsky, the former CEO of Celsius, is fighting back against the fraud charges leveled against him by the FTC. He is seeking dismissal of the charges on grounds that they do not meet the criteria required under relevant legislation. Mashinsky and his former colleague are accused of deceiving customers and manipulating market prices for personal gain. The case highlights the regulatory challenges faced by the crypto industry and the need for clear guidelines to protect consumers. As the legal battle unfolds, it remains to be seen how this high-profile case will impact the future of crypto lending platforms.
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