Alexander Mashinsky, the former CEO of Celsius (CEL), was brought before American justice last Thursday after his arrest for his fraudulent management of the platform. At the same time, the company and its directors are also facing 3 complaints from the SEC, the CFTC and the FTC.
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Alexander Mashinsky must answer in court for his management of Celsius
Alexander Mashinsky, the co-founder and ex-CEO of the Celsius Network (CEL) cryptocurrency platform was arrested and presented to American justice at the end of last week.
Thus, the person concerned faces 7 counts, including fraud against various market laws, as well as manipulation of the CEL token. Roni Cohen-Pavon, the platform’s former chief revenue officer, is also facing charges although he is currently in Israel.
The indictment documenting the situation alleges that the two defendants pocketed $42 million and $3.6 million, respectively, from their sale of CELs, while Alex Mashinsky publicly stated that he sold nothing. celsius, ” falsely portrayed as a safe and secure institution “, knew a peak of $25 billion in assets under management in fall 2021.
In addition, the way in which these funds were managed is particularly singled out:
“Celsius employees orchestrated a scheme to inflate the price of Celsius’ proprietary token CEL. In the first scheme, Mashinsky misled clients about essential aspects of Celsius’s business, including Celsius’ success and profitability and the nature of the investments Celsius made with client funds. »
In parallel, the company and several of its leaders are also facing complaints from 3 government agenciesnamely the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), as well as the Federal Trade Commission (FTC).
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A catastrophic management already called into question
The mismanagement of Celsius by its leaders has often been questioned since the bankruptcy of the platform. Indeed, if the model ended up stalling at the end of spring 2022 in the wake of the Terra (LUNA) affair, it turned out that the company could have been insolvent as early as 2019.
Among the elements that accelerated this fall, there were in particular short-selling of stETH against ETH,impermanent lossnot covered on decentralized finance (DeFi) protocols, but also the fact that Alex Machinsky would have taken control of the trading strategy against the advice of these traders.
During the summer of 2022, a hole of 2.84 billion dollars in the accounts of the company has thus been revealed.
According to Jonathan Ohring, Alexander Mashinsky’s lawyer, the latter has “vehemently denied” the facts of which he has been accused lately, and he would have “look forward to vigorously defending ourselves in court against these baseless accusations“.
Moreover, his bail was set at $40 millioncared for by his wife and “another person”.
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Sources: Bloomberg, Image: PiarasÓ Mídheach via Wikimedia (CC-BY-2.0)
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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