Asset Freezing Order Issued Against Former Celsius Network CEO Amidst Legal Troubles
Federal authorities have taken action against Alex Mashinsky, the former CEO of Celsius Network, who faced seven criminal charges in July.
A recent court order has been issued by the Department of Justice, freezing Mashinsky’s various bank accounts. Specifically, this order prevents any funds from leaving accounts held at Goldman Sachs, Merrill Lynch, First Republic Securities, SoFi Bank, and SoFi Securities.
Additionally, it mentions a property in Texas that Mashinsky co-owns with his wife, Kristine.
In July, federal prosecutors accused Mashinsky of fraud, alleging that he deceived investors and that his company engaged in risky trading practices. Furthermore, regulatory bodies such as the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC) have also levied civil charges against Celsius.
The regulators claim that Celsius repeatedly provided false information to customers about the platform’s safety and sold unregistered securities. They contend that the company misleadingly marketed itself as a secure alternative to traditional banking, despite evidence to the contrary.
It is worth noting that Celsius was one of numerous crypto firms that faced financial difficulties last year. Promising investors significant returns, it assured them of its safety. However, in June, it halted user withdrawals citing “extreme market conditions” and filed for bankruptcy a month later, revealing a deficit of $1.2 billion in assets compared to liabilities.
Federal authorities allege that Mashinsky reassured investors about the platform’s safety while being aware of its risks.
They claim that he profited personally, pocketing $42 million through fraudulent actions at the expense of customers.
