A federal judge has granted a Justice Department motion to freeze specific bank accounts and assets associated with former Celsius CEO Alex Mashinsky. The ruling, issued on September 5, pertains to an order restraining Mashinsky's assets. As a result, the Justice Department can now freeze accounts linked to financial institutions such as Goldman Sachs and Merrill Lynch, along with accounts held under Mashinsky's name at First Republic, SoFi Bank, and SoFi Securities.
The order also extends to a property in Austin, Texas, which Mashinsky and his wife, Kristine, purchased in 2021. This property has been on the market for over a year, coinciding with Celsius filing for bankruptcy in July 2022. Alex Mashinsky co- founded Celsius, a cryptocurrency lending platform, in 2017 but stepped down from his role as CEO in September 2022. At the time, he cited his position as a growing distraction for users dealing with financial difficulties. The company has faced legal scrutiny from both state and federal authorities for alleged offering of unregistered securities.
In July, US authorities arrested Mashinsky on charges of misleading Celsius investors and defrauding users out of billions of dollars. Mashinsky entered a plea of not guilty to all charges and was released on $40 million bail. His release came with conditions, including electronic monitoring and restrictions on transferring or receiving more than $10,000 without prior approval.
Both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) filed civil lawsuits against Mashinsky in July. They also announced a settlement with Celsius to resolve criminal and civil charges related to the former CEO. Additionally, the Federal Trade Commission (FTC) imposed a $4.7 billion fine on Celsius for alleged "fraudulent" activities, although this judgment was suspended to allow the platform to use the assets in its bankruptcy proceedings.
