Ovunc Kutlu
13 July 2023•Update: 13 July 2023
ISTANBUL
Former CEO of the bankrupt crypto firm Celsius was arrested on Thursday, while the company has agreed to pay $4.7 billion settlement with US regulators.
Alex Mashinsky, born in Ukraine, was arrested by federal law enforcement, as the Justice Department charged him on seven counts that included securities fraud, commodities fraud, wire fraud and conspiracy to manipulate the price of Celsius' token CEL.
He had been sued in January by the New York State for defrauding investors, while New York Attorney General Letitia James filed a lawsuit against him for misleading investors about the health of the company.
Separately, Mashinsky and Celsius also faces charges against three US market regulators – Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Federal Trade Commission (FTC).
The SEC said Mashinsky and Celsius raised billions of dollars from investors through "unregistered and fraudulent offers and sales of crypto asset securities" from March 2018 through June 2022, according to a Thursday filing in the US District Court for the Southern District of New York.
The FTC said in a separate statement on Thursday that it charges former executives of Celsius with "duping consumers into transferring cryptocurrency into their platform and then squandering billions in user deposits."
Celsius and its affiliates agreed to a judgment of $4.7 billion, which will be suspended to permit Celsius to return its remaining assets to consumers in bankruptcy proceedings, it added.
