U.S. authorities file seven charges against Celsius and its former CEO

The United States Department of Justice has charged Celsius and its former chief executive, Alex Mashinsky, with seven criminal counts.

According to court documents, Mashinsky is suspected of securities and commodities fraud using electronic communications, manipulating the price of the CEL token, misleading investors, and conspiring to defraud customers.

Authorities brought similar charges against Celsius’s former Chief Revenue Officer Ron Cohen-Pavon. SEC also filed suit against the company for selling unregistered securities.

According to investigators, Mashinsky and Cohen-Pavon earned more than $43 million from manipulating CEL. Representatives from the SEC added that Celsius engaged in “risky trading practices” and issued unsecured loans.

The CFTC also joined the case. The regulator said it had reached an agreement with Celsius that permanently bars the platform from managing investors’ assets.

“The message we are sending is fairly simple: if you steal from ordinary investors to line your own pockets, we will hold you to account,” said U.S. Attorney Damian Williams.

Earlier, Bloomberg reported that law enforcement arrested Mashinsky. However, according to Reuters, on July 14 the former head of the company appeared in court in casual clothes and without shackles. He did not plead guilty to any of the charges.

Judge Anna Wang said Mashinsky would be released on a $40 million bond, secured by his Manhattan residence.

In June 2022, Celsius halted withdrawals, trading and transfers between accounts “due to extreme market conditions”.

Following the filing of bankruptcy at Celsius, the company reported a balance-sheet “hole” of $1.2 billion . In August it emerged that the company’s liabilities exceeded its assets by $2.85 billion.

In September, the platform’s head, Alex Mashinsky left the post of chief executive.

Earlier in 2023, the New York Attorney General’s Office accused Celsius’s CEO of deceiving investors by billions.