#mashinsky

Former Celsius CEO Alex Mashinsky's trial start date has been postponed by U.S. District Judge John Koeltl due to the "volume of discovery" and the "complexity of the case." This decision grants the United States Department of Justice additional time for discovery, allowing them to provide related documents to Mashinsky's defense team. In an order issued on July 25, Judge Koeltl stated that the time between July 25 and Oct. 3 will not be considered for Speedy Trial Act calculations, which require a federal criminal trial to commence within 70 days of an indictment being filed. The judge justified the continuance, prioritizing the interests of justice over the defendant's right to a speedy trial. Under the law, prosecutors are obligated to disclose any information that could be beneficial to Mashinsky's defense and relevant to the

Alex Mashinsky Pleads Not Guilty on All Counts, Released on Bail

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Former CEO of Celsius Network, Alex Mashinsky, was arrested and charged on Thursday with securities and wire fraud among other offenses, according to Reuters:

“Mashinsky, 57, arrived in federal court in Manhattan for his arraignment wearing a gray polo shirt, jeans and no handcuffs.”

Mashinsky pleaded not guilty to all charges and was released on a $40 million bond. The arrest followed a series of lawsuits filed against Celsius and Mashinsky by the CFTC, FTC and SEC.

Before the arrest, New York State got to him first when NY Attorney General Letitia James sued him in state court, accusing him of misleading thousands of investors in the state.

U.S. Magistrate Judge Ona Wang approved Mashinsky’s bail, backed by his Manhattan residence and signatures from his wife and another party. His travel has been limited to the Eastern and Southern District of New York.

Mashinsky’s attorneys, Benjamin Alee and Jonathan Ohring, have yet to publicly comment on the case. However, they said in a statement to CoinDesk that “he looks forward to vigorously defending himself in court against these baseless charges.”

Celsius, which declared bankruptcy in 2022 following a rapid decline in crypto prices and a wave of customer withdrawal requests, is under scrutiny. Prosecutors allege that Mashinsky, from 2018 to 2022, deliberately misled investors about key aspects of Celsius’s operations:

“[Mashinsky] orchestrated a scheme to defraud customers of Celsius Network LLC and its related entities.”

The charges focus on the company’s Earn Interest Program, which promised high returns of up to 17% and presented the platform as a safe haven akin to a modern-day bank. These claims, prosecutors argue, starkly contrast with the platform’s allegedly high-risk strategies.

Mashinsky and Celsius have yet to change their stance on the platform’s financial stability, the SEC says.

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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

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Celsius Ex-CEO Alex Mashinsky Arrested and Sued by SEC

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Alex Mashinsky, former CEO of the cryptocurrency lender Celsius Network, has been arrested and faces multiple legal actions following his charge of fraud and alleged attempts to manipulate cryptocurrencies, according to Bloomberg sources:

“[Mashinsky] orchestrated a scheme to defraud customers of Celsius Network LLC and its related entities.”

Mashinsky allegedly engineered a scheme to defraud Celsius customers between 2018 and June 2022, adding to the existing legal pressure on the one-time crypto industry figurehead, whose company Celsius Network collapsed last year.

To add to Mashinsky’s great day, the SEC filed lawsuits against Mashinsky and Celsius, making that now, three regulatory bodies – the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC) – to file against the former CEO.

But, they werent the first. New York Attorney General Letitia James sued him for fraud in January, claiming that Mashinsky deceived New York investors, costing them billions of dollars in crypto assets by falsifying the company’s financial records.

At its peak, Celsius was recognized among several high-profile crypto firms known for offering high interest rates on digital-asset deposits. However, following the TerraUSD stablecoin’s failure and subsequent downturn in the digital-asset market, the company found itself unable to fulfill a wave of customer withdrawals.

Celsius tried to bounce back, with Mashinsky thinking about shifting to custodial services, but nobody was interested.

Mashinsky’s attorney has not yet issued a statement. Alongside Mashinsky’s arrest, prosecutors also took Roni Cohen-Pavon, the company’s Chief Revenue Officer, into custody.

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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

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Mashinsky argues Celsius Earn account are not securities

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Celsius co-founder and former CEO Alex Mashinksy said Celsius Earn’s accounts are not securities in his defense of the New York’s attorney general charges against him, according to a May 2 court filing.

New York attorney general classifies Celsius Earn accounts as securities

In its filing, New York’s attorney general Letitia James argued that Celsius Earn’s account constituted securities under the Martin Act.

According to the regulator, these accounts were securities because “investors deposited their cryptocurrency assets with Celsius with the expectation of receiving promised yields from Celsius’s efforts in deploying investors’ pooled assets.”

Mashinsky argues against it

However, Mashinsky countered that the bankrupt lender’s Earn product could not be classified as securities under the Martin Act or Howey’s test. According to him, New York’s allegations “merely parrot the three Howey prongs.”

Mashinsky argued that the complaints failed to plead a common enterprise, adding that “Earn Account holders’ fortunes were based on a predetermined rate and were not dependent on Celsius’s revenue generation.”

The former CEO further noted that the account holders received the same guaranteed interest payment on their account — irrespective of Celsius’s success or failure to deploy the assets.

To back his claim, Mashinsky cited various legal precedents where the court ruled that no “investment contract” existed when a predetermined interest rate was involved.

Celsius Earn’s account allowed investors to deposit their digital assets on the platform to earn up to 18% interest annually. New York’s attorney general said the program was the bankrupt’s lender’s “flagship product.”

SEC targeting crypto firms offering interest-bearing products

Under Chair Gary Gensler, the U.S. Securities and Exchange Commission (SEC) has targeted more crypto firms offering interest-bearing products.

The financial regulator filed charges against Gemini and Genesis over their defunct Earn program and fined Kraken $30 million for its staking product.

The SEC also issued a Wells Notice to Coinbase and fined bankrupt lender BlockFi $100 million over its Interest accounts.

In February, the Commission issued an investor alert on crypto interest-bearing accounts. According to the financial regulator, crypto companies offering this product do not provide investors the same protections as banks or credit unions — adding that the digital assets sent to these firms are uninsured.

The post Mashinsky argues Celsius Earn account are not securities appeared first on CryptoSlate.

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Celsius' Mashinsky Finally Sued by NY Attorney General

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Key Takeaways

New York Attorney General Letitia James filed a civil suit against former Celsius CEO Alex Mashinsky today.

James claims Mashinsky defrauded investors by making false statements about the company’s financials.

She is seeking restitution, damages, and to bar Mashinsky from ever doing business in New York again.

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Former Celsius CEO Alex Mashinsky is being sued by the New York Attorney General for defrauding investors and making false statements about the company’s financials.

Mashinsky Feels the Heat

Alex Mashinsky is finally facing consequences for his mishandling of Celsius.

New York Attorney General Letitia James filed a civil lawsuit against the former Celsius CEO earlier today. The filing accuses Mashinsky of making false statements to investors about Celsius’ financial situation.

“Alex Mashinsky lied to people about the risks of investing in Celsius, hid its deteriorating financial condition, and failed to register in New York,” said James in a Twitter post. She claimed he had “defrauded” hardworking people by promising them big returns, but had only left them in “financial ruin.”

James stated she was suing Mashinsky for restitution and damages, and was seeking to ban him from operating businesses in New York ever again. Her office claims that 26,000 New Yorkers had deposited over $440 million in Celsius as of December 31, 2021.

Once a leading crypto lending company, Celsius froze customer fund withdrawals in early June, citing “extreme market conditions.” The firm subsequently filed for bankruptcy; the news was met with consternation, outrage, and threats of suicide from customers, some of whom claimed to have lost their entire life savings to the platform. 

Court filings subsequently revealed that the company had a $1.19 billion hole in its balance sheet. Celsius insiders have claimed the hole was partially due to Mashinsky using customer funds to directionally trade BTC—against the advice of multiple senior figures at the firm. Mashinsky thus reportedly lost $50 million of company funds in January 2022 alone.

Months after filing for bankruptcy, Mashinsky suggested rebranding Celsius to “Kelvin” and to move forward with the company by focusing on crypto custody services. He resigned shortly thereafter. 

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.

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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

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Celsius CEO Alex Mashinsky resigns; CEL tanks

Celsius Network CEO Alex Mashinsky resigned from his position at the struggling crypto lender on Sept. 17. According to a Sept. 27 press statement, Mashinky said he is resigning his position to focus on a plan that would provide the best outcome for creditors. He continued that he is “willing and available to continue to work with the Company and their advisors to achieve a successful…