Investing
Alex Mashinsky Arrested as Several Agencies Sue Celsius and the Ex CEO
Published:
Alex Mashinsky, co-founder and former Chief Executive of the imploded Celsius Network, got arrested on Thursday, Bloomberg reported. The 58-year-old business executive and his collapsed crypto lending firm face a lawsuit from the US Securities and Exchange Commission (SEC) over securities fraud. The US DOJ, CTFC, and FTC also filed lawsuits against the former CEO.
Celsius and Mashinsky Charged with Securities Fraud
Celsius Network co-founder and former CEO Alex Mashinksy was arrested on Thursday after the SEC filed a lawsuit against the crypto lender, accusing it of securities fraud. According to Bloomberg, the Ukraine-born crypto entrepreneur was detained in the morning hours on July 13.
The move comes shortly after the SEC unveiled it has filed charges against Celsius, a crypto lending firm that collapsed last year due to insolvency. The report states that the criminal case is not public for now.
Earlier this month, Bloomberg reported that Celsius and Mashinsky may also face legal action from the Commodity Futures Trading Commission (CFTC), another US financial regulator. The CFTC reported that the troubled crypto firm and Mashinsky violated US regulations by misleading investors.
Celsius Bankruptcy and the New Owner of Crypto Lender’s Assets
The SEC’s lawsuit against Celsius Network comes exactly a year after the crypto lender declared bankruptcy after revealing a huge dent in its balance sheet caused by the catastrophic collapse of the Terraform ecosystem in May 2022.
As a result, Celsius could not cope with a string of customer withdrawals, leading to a collapse. In its bankruptcy filing, the crypto lender reported it had between $1 billion and $10 billion in assets and liabilities and over 100,000 creditors.
The implosion led to a bidding war for the bankrupt Celsius Network between multiple Wall Street firms. In May 2023, it was revealed that the crypto consortium Fahrenheit won the battle to acquire the company’s assets.
Fahrenheit, the group of buyers that includes prominent firms such as venture capital (VC) investor Arrington Capital and miner US Bitcoin Corp, ousted NovaWulf’s attempts to buy out Celsius, whose assets were previously valued at roughly $2 billion. Under the new deal, it was reported that the new entity would secure $450 million to $500 million in liquid crypto funds. At the same time, US Bitcoin Corp would build a set of crypto mining facilities, including a brand new 100-megawatt plant.
Finance is changing.
Learn how, with Five Minute Finance.
A weekly newsletter that covers the big trends in FinTech and Decentralized Finance.
Do you think the latest lawsuit against Celsius could be another FTX-like case? Let us know in the comments below.
The post Alex Mashinsky Arrested as Several Agencies Sue Celsius and the Ex CEO appeared first on Tokenist.
This article originally appeared on The Tokenist
Credit Card Companies Are Doing Something Nuts
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.