Bankrupted crypto lending company Celsius and its co-founder and former CEO Alex Mashinsky were sued by the US Department of Justice (DOJ) today, and Mashinsky was already arrested. DOJ charged Mashinsky on seven counts, including securities fraud, commodities fraud, wire fraud and conspiracy to manipulate the price of $CEL.
In addition to DOJ, the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Federal Trade Commission (FTC) all sued Celsius and Mashinsky today.
DOJ accused Mashinsky and Celsius' Chief Revenue Officer Roni Cohen-Pavon of plotting a years long scheme to mislead customers on the market value of the company's value and interest in $CEL. The indictment said, "Mashinsky portrayed Celsius as a modern-day bank, where customers could safely deposit crypto assets and earn interest. In truth, however, Mashinsky operated Celsius as a risky investment fund, taking in customer money under false and misleading pretenses." Mashinsky also misled investors about loans being collateralized, counter-parties defaulting, and regulatory scrutiny.
The SEC accused Celsius and Mashinsky of conducting unregistered sales of securities ($CEL), repeatedly lying to investors about Celsius's financial standing, and manipulating the price of $CEL. In the SEC's lawsuit, only one token, $CEL, was described as a security.
Celsius filed for bankruptcy last July. In May 2023, Fahrenheit won the bid to acquire Celsius' assets.
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