Current:Home > MarketsCelsius founder Alex Mashinsky arrested and charged with fraud-LoTradeCoin
Celsius founder Alex Mashinsky arrested and charged with fraud
View Date:2024-12-24 11:16:29
Alex Mashinsky, the founder and former CEO of bankrupt cryptocurrency lender Celsius, has been arrested and charged with fraud, federal prosecutors said on Thursday.
Mashinsky was charged with seven criminal counts, including securities, commodities and wire fraud, according to the U.S. attorney's office in Manhattan. He is also accused of misleading Celsius customers about the company's business, including how it would use their money, while depicting the lender as a bank when in fact it operated as a risky investment fund, according to the indictment.
Celsius was a platform that allowed its customers to earn returns on their crypto assets in the form of weekly payments, take out loans secured by their crypto assets and custody their crypto assets, according to the DOJ.
Mashinsky aggressively promoted Celsius through the media and Celsius's website, including a weekly "Ask Mashinsky Anything" broadcast, according to the indictment. Celsius employees noticed false and misleading statements in these programs and warned Mashinsky about them, but they were ignored, prosecutors allege.
By the fall of 2021, Celsius had grown to become a behemoth in the crypto world, purportedly holding $25 billion in assets, according to the indictment. Last year, amid a crash in cryptocurrency values, the company filed for bankruptcy, leaving customers without their funds.
Both Mashinsky and Roni Cohen-Pavon, Celsius's former chief revenue officer, were charged with manipulating the price of Celsius's proprietary crypto token, while covertly selling their own tokens at artificially inflated prices. Mashinsky personally gained about $42 million from his sales of the token, and Cohen-Pavon made at least $3.6 million, according to the DOJ.
The U.S. Securities and Exchange Commission also sued Mashinsky and Celsius on Thursday, alleging the company misled investors with unregistered and often fraudulent offers and sales of crypto securities.
"As alleged in the indictment, Mashinsky and Cohen-Pavon knowingly engaged in complex financial schemes, deliberately misrepresenting the company's business model and criminally manipulating the value of Celsius's proprietary crypto token CEL, while serving in leadership roles at Celsius," FBI Acting Assistant Director in Charge Christie M. Curtis said in a statement.
Mashinsky didn't immediately return a request for comment.
—With reporting by the Associated Press
- In:
- Cryptocurrency
Sanvi Bangalore is a business reporting intern for CBS MoneyWatch. She attends American University in Washington, D.C., and is studying business administration and journalism.
TwitterveryGood! (4)
Related
- Residents urged to shelter in place after apparent explosion at Louisville business
- Shark spits out spiky land-loving creature in front of shocked scientists in Australia
- Costco issues recall for some Tillamook cheese slices that could contain 'plastic pieces'
- The Daily Money: Bodycams to prevent shoplifting?
- 10 Trendy Bags To Bring to All of Your Holiday Plans
- 26 migrants found in big money human smuggling operation near San Antonio
- Optimism is just what the doctor ordered. But what if I’m already too negative?
- Teen Mom's Briana DeJesus Reveals If She'd Ever Get Back Together With Ex Devoin Austin
- 'Unfortunate error': 'Wicked' dolls with porn site on packaging pulled from Target, Amazon
- John Stamos talks rocking through Beach Boys stage fails, showtime hair, Bob Saget lessons
Ranking
- We Can Tell You How to Get to Sesame Street—and Even More Secrets About the Beloved Show
- Teen Mom's Briana DeJesus Reveals If She'd Ever Get Back Together With Ex Devoin Austin
- California woman found dead in 2023 confirmed as state's first fatal black bear attack
- Starship splashes down for first time in 4th test: See progression of the SpaceX flights
- 2 credit unions in Mississippi and Louisiana are planning to merge
- Biden says he would not pardon son Hunter if he's convicted in gun trial
- Wisconsin Republican leader Robin Vos says recall petition effort against him failed
- 2024 cicada map: Where to find Brood XIII, Brood XIX around the Midwest and Southeast
Recommendation
-
Cruel Intentions' Brooke Lena Johnson Teases the Biggest Differences Between the Show and the 1999 Film
-
Inside RuPaul and Husband Georges LeBar's Famously Private Love Story
-
Demand for food delivery has skyrocketed. So have complaints about some drivers
-
The Brat Pack met the Rat Pack when Andrew McCarthy, Rob Lowe partied with Sammy Davis Jr.
-
Dallas Long, who won 2 Olympic medals while dominating the shot put in the 1960s, has died at 84
-
Missing 21-year-old woman possibly with man and his missing 2-year-old daughter
-
Watch as fearless bear fights off 2 alligators swimming in Florida river
-
Alex Jones to liquidate assets to pay Sandy Hook families