Celsius Network CEO Alex Mashinsky Pleads Not Guilty after Arrest and Fraud Charges
Cryptocurrency lender Celsius Network founder Alex Mashinsky was arrested on charges of fraud. The bankrupt crypto lender has been blamed for defrauding investors and artificially inflating price of its token and other assets. Mashinsky claims not guilty to fraud charges. Troubles for Celsius Network started last year and the company filed for bankruptcy in July 2022. Celsius Network was founded in 2017 and raised money from depositors and investors by offering them unreasonable interest. The money was lent to institutional investors and native tokens were issued.
Celsius Network and Mashinsky have been charged by three federal regulatory agencies. They face seven criminal charges including wire fraud, securities fraud and for flouting commodity trading rules. Mashinsky has said that he and his company have not misled investors or customers. The company has agreed to pay $4.7 billion in fines to regulators in order to settle some of the charges.
Cryptocurrency exchange FTX faced bankruptcy last year. FTX founder founder, Sam Bankman-Fried, was charged with fraud last year and he has also pleaded not guilty. Most of these crypto companies have generated high amount of cash as crypto assets have jumped in the recent times. However, they are lacking a lot in terms of corporate management. Sam Bankman-Fried and his company have been blamed for being careless about investors’ funds and mindless spending spree.
Celsius Network has been charged with artificially inflating the value of its crypto token CEL. The company falsely claimed to have over one million users when the records show that the user numbers were around 500,000. Many of those user accounts were not even active on the network.
Meanwhile, crypto currencies were trading near their yearly highs as crypto investors are confident that institutional funding will flow into cryptocurrencies if BlackRock manages to get spot Bitcoin ETF approved by SEC. After BlackRock applied for SEC approval last month, BitCoin and other cryptocurrencies have witnessed quick jump in valuations.