Alex Mashinsky Sees Assets Frozen in Criminal Case

By Mark Hunter

5 days agoThu Sep 07 2023 09:52:1

Alex-Mashinsky-Sees-Assets-Frozen-in-Criminal-Case

Reading Time: 2 minutes

  • Former Celsius Network CEO Alex Mashinsky has had his assets frozen amid ongoing criminal charges
  • Mashinsky faces seven criminal charges for alleged investor deception and risky trading practices
  • The order was sealed in mid-August and has only now been unsealed

Banking and real estate assets owned by former Celsius Network CEO Alex Mashinsky have been frozen as part of an ongoing criminal case against him, according to recently unsealed court documents. Mashinsky was arrested in July on multiple counts, including securities fraud and manipulation related to the company’s CEL token, and the assets have been frozen in order to prevent anything from being sold. Mashinsky has maintained his innocence, with his legal team characterizing the charges as “baseless.”

Mashinsky Facing Civil and Criminal Charges

Federal prosecutors allege that Mashinsky misled investors and his firm engaged in “risky trading practices” prior to Celsius’ collapse in July 2022with seven criminal charges filed against him. Additionally, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC) have all brought civil charges against Celsius Network. Mashinsky was released on a $40 million bond shortly after his arrest.

Regulators have accused the crypto lending platform of repeatedly deceiving customers about the safety of its platform and selling unregistered securities, alleging that the company falsely presented Celsius as a secure alternative to traditional banking, despite evidence to the contrary.

Order Frozen for Three Weeks

On August 16, Judge Jed Rakoff issued an order preventing financial institutions from selling assets held in several Goldman Sachs bank accounts under the name of Koala LLC, a company linked to Mashinsky, as well as a residential property in Austin, Texas.

The order to freeze Mashinsky’s assets has been unsealed after initially being kept confidential due to concerns that the accounts could have been emptied and the property sold before they could be frozen. Prosecutors have stated that they will require six to eight weeks to gather evidence, including examining Mashinsky’s online videos in which he is alleged to have misled investors, before presenting Mashinsky’s legal team with the evidence.

Celsius’ creditors are currently in discussions over the proposed sale of the remaining assets to a buyer consortium called Fahrenheit as part of a plan that could potentially allow them to recover some of their holdings.

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