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Celsius Founder Alex Mashinsky Charged with Fraud

Crypto Lender Accused of Misleading Investors and Manipulating Markets

Federal authorities charged the founder and former CEO of Celsius Network, a bankrupt crypto platform, with defrauding customers and manipulating the price of the company’s own digital token.

Charges Against Celsius Executives:

  • Alexander Mashinsky, founder and former CEO, is accused of:
    • Making false statements about Celsius’s financial health and safety.
    • Misrepresenting the risks associated with investing with Celsius.
  • Roni Cohen-Pavon, former Chief Revenue Officer, is charged with:
    • Working with Mashinsky to manipulate the price of CEL, Celsius’s token.
    • Using customer deposits to buy CEL and inflate its value artificially.

Celsius Accepted Responsibility

In a separate agreement, Celsius Network accepted responsibility for its role in the alleged fraudulent schemes. The company is currently in bankruptcy proceedings.

How the Fraud Allegedly Worked:

  • Mashinsky is accused of publicly portraying Celsius as a safe and secure platform to attract investors.
  • Many investors were retail customers, not large institutions.
  • Celsius allegedly used customer deposits to buy its own CEL token, driving up the price artificially.
  • Mashinsky and Cohen-Pavon are accused of selling their own CEL holdings for a profit while manipulating the market.

Impact on Investors:

  • In June 2022, Celsius froze customer withdrawals, leaving billions of dollars in crypto assets inaccessible.
  • The platform later filed for bankruptcy.

Next Steps:

  • Mashinsky was arrested and will appear in court.
  • Cohen-Pavon, an Israeli citizen, is currently abroad.
  • The case is ongoing, and both defendants are presumed innocent until proven guilty.

This case highlights the potential risks associated with crypto investments and the importance of thorough research before investing in any crypto platform.

Charges against Alex Mashinsky

DefendantAgeResidenceChargesMaximum Potential Sentences
MASHINSKY57New York, New YorkSecurities fraud(Count One)Commodities fraud(Count Two)Wire fraud(Count Three)Conspiracy to commit securities fraud, market manipulation, and wire fraud(Count Four)Securities fraud(Count Five)Market manipulation(Count Six)Wire fraud(Count Seven)20 years 10 years 20 years Five years  20 years 20 years 20 years
COHEN-PAVON36IsraelConspiracy to commit securities fraud, market manipulation, and wire fraud(Count Four)Securities fraud(Count Five)Market manipulation(Count Six)Wire fraud(Count Seven)Five years  20 years 20 years 20 years

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