About a year after cryptocurrency platform Celsius Network went bankrupt, US authorities arrested former boss Alexander Mashinsky. He is accused of fraud and market manipulation, among other things, responsible public prosecutor Damian Williams announced on Thursday. Celsius filed for bankruptcy protection in mid-June 2022 – at that time the platform owed investors $4.7 billion (4.2 billion euros).
Mashinsky is accused of being responsible for a “plan” used to defraud customers through a series of false claims about the security of the Celsius platform, prosecutor Williams said. “It doesn’t matter if it’s an old fashioned scam or a new crypto scam. To us, this is all cheating. And we are here to punish that.”
More than a million customers
By the end of 2021, at the peak of its success, Celsius had more than one million customers investing more than $25 billion in the platform. When the value of digital currencies plummeted in the spring of 2022, Celsius ran into trouble. More and more customers withdrew their money. In mid-June, the platform stopped all payouts and filed for bankruptcy protection a month later.
In the days before the funds were frozen, Mashinsky continued to assure clients that Celsius was “financially strong” and had sufficient resources to meet any withdrawal requests, prosecutor Williams said. At the same time, however, he withdrew about $8 million of his own money from the platform.
Mashinsky was born in Ukraine and lived in Israel before moving to the United States. US authorities have also charged former Celsius chief financial officer Roni Cohen-Pavon, an Israeli citizen.
At the same time, the Federal Trade Commission, which is responsible for complaints against individual companies and consumer protection, reached an agreement with Celsius about paying out the remaining money to customers.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
