Former Celsius Network CEO Alex Mashinsky, currently facing seven criminal charges related to cryptocurrency fraud, is scheduled to begin trial on 17 September 2024, in a New York court.
Throughout the legal proceedings, he will remain free on $40 million bail, although certain travel and financial transaction restrictions are still in effect.
Roni Cohen-Pavon, the former chief revenue officer of Celsius, pleaded guilty to four criminal charges in September and is prepared to testify if required during Alex’s trial.
In a recent hearing at the United States (US) District Court for the Southern District of New York, Alex’s legal team indicated their likely defense strategy, which involves challenging the classification of cryptocurrency as a security.
They emphasised the subjective interpretation of the legal definition of a security, suggesting they may argue against this classification.
Meanwhile, the Department of Justice (DOJ) has taken steps to freeze the assets of the founder and former CEO of the defunct crypto lender.
The judge ordered the freezing of Alex’s bank accounts across multiple financial institutions, including prominent names like Goldman Sachs, Merrill Lynch, First Republic Securities, SoFi Bank, and SoFi Securities.
Additionally, this freeze extends to a property in Texas co-owned by Alex and his spouse, Kristine.
Celsius Network, once a prominent player in the crypto lending industry, faced significant financial difficulties and filed for bankruptcy in 2022, revealing substantial financial liabilities exceeding the platform’s assets by $1.2 billion.
In July, the Securities and Exchange Commission (SEC) initiated a lawsuit against Celsius and its former CEO, accusing them of fraudulent and unregistered sales of “crypto asset securities,” disseminating false information to investors about Celsius’s financial stability, and manipulating the price of CEL, the platform’s native token.
Following his arrest, Alex pleaded not guilty to multiple charges, including securities, commodities, and wire fraud, as well as manipulating the price of CEL tokens.
He was released on bail secured by his Manhattan residence, with travel restricted to the New York area.
He is also prohibited from opening new financial, business, or personal bank accounts, lines of credit, or cryptocurrency accounts without prior approval.
If found guilty, both Alex and Celsius’ chief risk officer, Roni, could face lengthy prison sentences spanning several decades.