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HomeLatest NewsFormer head of crypto firm Celsius to pay $4.2 billion fine after...

Former head of crypto firm Celsius to pay $4.2 billion fine after being arrested

Date: April 19, 2024 Time: 02:46:47

This Thursday the United States authorities have arrested Alex Mashinsky, the co-founder and former CEO of the Celsius cryptocurrency lending platform. He has been arrested after being accused of fraud after discovering the collapse of his company, in addition, he has agreed to pay a penalty of 4.2 billion euros.

Celsius, currently in bankruptcy, will not pay that penalty until it has repaid the money it owes to its users and will also be prohibited from ever managing client assets again, according to an agreement announced by the Federal Trade Commission (FTC). ). ).

Mashinsky lied to customers

Mashinsky, meanwhile, faces seven federal counts for alleged schemes to defraud Celsius clients and to inflate the price of its cryptocurrency, CEL, according to another indictment made public today by the US Attorney’s Office for the Southern District of New York. Prosecutors say the businessman lied to clients about the basics of the Celsius business, including its profitability and the type of investment funds that were being made with those deposited by users.

According to the indictment, while Mashinsky sold Celsius as a kind of bank where users could safely deposit their cryptocurrencies and earn interest, it actually operated as a risky investment fund without their knowledge. In parallel, the Prosecutor’s Office accuses him of illegally manipulating the CEL price for his own benefit, in collaboration with other company employees. Earlier this year, the New York state attorney general’s office had already sued Mashinsky, claiming he “defrauded hundreds of miles of investors” on his cryptocurrency exchange.

Celsius is a cryptocurrency lending platform where investors can deposit their cryptocurrencies in exchange for promises of high returns on those digital assets, and Mashinsky was the public face of this company, which filed for bankruptcy in July 2022. Along with former CEO Another former Celsius senior official, Roni Cohen-Pavon, was also charged today in criminal proceedings. If found guilty, both face a possible sentence of several decades in prison.

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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