Former Celsius CEO Alex Mashinsky was reportedly arrested on the morning of July 13 following an investigation into the collapse of cryptocurrency lender Celsius. The arrest came shortly after the US Securities and Exchange Commission (SEC) filed a lawsuit against Celsius on the same day. Mashinsky has been charged with fraud and attempted market manipulation by the US Department of Justice.
The troubles for Celsius and its former CEO began in June 2022 when the platform abruptly suspended withdrawals, leading to investigations by securities regulators in five US states. The company subsequently filed for bankruptcy. The New York Attorney General indicated Mashinsky in January 2023, accusing him of misleading investors and causing billions of dollars in losses.
A recent investigation by the Commodity Futures Trading Commission (CFTC) found that Celsius and Mashinsky violated multiple US regulations prior to the company's collapse. The cryptocurrency lender had gained traction during the 2021 bull run by offering attractive interest rates on c cryptocurrency deposits. However, the collapse of the Terra ecosystem and the downturn in the cryptocurrency market had a severe impact on Celsius.
Mashinsky's arrest and the SEC's lawsuit against Celsius come in the wake of similar legal actions against cryptocurrency exchanges Binance and Coinbase by the SEC. Celsius Network has not yet provided a response to the developments.
