In a significant development for the cryptocurrency industry, Alex Mashinsky, the founder and former CEO of Celsius Network, has been arrested and charged with fraud.
The US prosecutor in New York announced the charges on Thursday, coinciding with three federal regulatory agencies filing lawsuits against Mashinsky and his company.
According to the unsealed indictment, Mashinsky, 57, faces seven criminal counts, including securities fraud, commodities fraud, and wire fraud. Additionally, Roni Cohen-Pavon, Celsius’ former chief revenue officer, is facing four criminal counts.
Prosecutors and federal regulators have accused Mashinsky of deceiving customers and artificially inflating the value of Celsius Network’s proprietary crypto token.
As news of the arrest broke, lawyers for Mashinsky and Celsius were unavailable for immediate comment. Similarly, Cohen-Pavon’s attorney could not be reached for a response.
The charges against Mashinsky mark another blow for the cryptocurrency industry, which has been grappling with the aftermath of declining crypto prices that led to the downfall of several companies, including FTX, a prominent exchange giant.
FTX’s founder, Sam Bankman-Fried, faced fraud charges last year and has pleaded not guilty.
The arrest and indictment of Mashinsky and the ongoing legal actions highlight the increasing scrutiny faced by individuals and companies in the crypto world, as authorities aim to ensure accountability and safeguard investor interests.
