The crypto lending platform, along with its former CEO Alex Mashinsky, faced a series of fraud allegations from the Securities and Exchange Commission (SEC). Despite this, Mashinsky decided to plead not guilty in response to these charges. On July 13, various significant events unfolded in the cryptocurrency world. While it was an important day for the XRP community, it brought less happiness to Celsius Network.
The previous CEO of the crypto lending platform confronted a set of seven criminal charges, which included securities fraud, commodities fraud, and wire fraud. These allegations were detailed in an unveiled indictment that became public on Thursday. Shortly after this announcement, news of Alex Mashinsky’s arrest became known.
Alex Mashinsky appeared at his arraignment in a federal court situated in Manhattan. In a recent press conference, US lawyer Damian Williams stated, “Whether it’s traditional fraud or some new-age crypto scheme, it is irrelevant to us. It is all considered fraud.”
Alex Mashinsky Faces a Plethora of Accusations in Relation to Celsius Network
Earlier this year, New York Attorney General Letitia James filed a lawsuit against Mashinsky, which is worth mentioning. In her legal action, she claimed that he was involved in a fraudulent scheme that aimed to deceive a large number of investors. Additionally, both the Commodity Futures Trading Commission and the Federal Trade Commission brought lawsuits against Mashinsky and his company.
They accused them of promoting Celsius as a secure platform while utilizing email marketing campaigns with phrases such as “Pour Yourself a Cup of Profits” and “Profits in your Pocket” to endorse their interest-earning program.
Amidst these unfolding events, an interview conducted by Reuters in January 2021 with Mashinsky resurfaced. In the interview, he denied allegations of misleading customers and artificially inflating the value of his company’s proprietary crypto token. Mashinsky even emphasized the presence of a community consisting of millions of people who are focused on building the future of finance and acting in the best interest of others.