Alex Mashinsky Faces Fraud and Market Manipulation Charges in Court

Former CEO of Celsius, Alex Mashinsky, is set to appear in the U.S. District Court for the Southern District of New York on November 13. He faces multiple serious charges, including securities fraud, commodities fraud, wire fraud, and market manipulation.

Judge’s Orders

According to documents filed on October 23, Judge John Cote has ordered Mashinsky and the prosecutors to present arguments and “preserve testimony” concerning his motion to dismiss certain charges in the indictment. In addition to the November 13 hearing, a pretrial conference is scheduled for January 16, with a jury trial set to begin on January 28, 2025.

Mashinsky’s legal team filed a motion in September to bring six witnesses residing outside the U.S., including former Celsius Chief Revenue Officer Roni Cohen-Pavon, to testify. Mashinsky’s lawyers argue that these individuals disregarded his instructions to sell Celsius’ native token CEL, instead purchasing additional tokens on the FTX exchange throughout 2021.

Court Appearances

This will be the 59-year-old’s first court appearance since February, when he attended a Curcio hearing related to potential conflicts of interest, as his lawyers also represent FTX founder Sam Bankman-Fried (SBF) in another case.

Legal Expenses

Mashinsky and Cohen-Pavon are accused of manipulating CEL’s price while secretly selling their holdings at high prices. Reportedly, the former gained approximately $42 million from selling these tokens. The two are also alleged to have misled customers about the company’s success, profitability, and the nature of investments made using customer funds.

In July 2023, the former Celsius boss was arrested and charged with seven felonies. He has pleaded not guilty to all charges and is currently defending himself in court. He also faces civil suits filed by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Meanwhile, Cohen-Pavon initially pleaded not guilty but later changed his plea to guilty and is scheduled for sentencing on December 11. Following his arrest, he faces travel restrictions, limiting his movements between New York and Israel.

Celsius filed for bankruptcy in July 2022. As of August 2024, the company has repaid approximately $2.53 billion to creditors. According to a document, this amount represents around 84% of the $3 billion the defunct crypto platform needs to return to over 375,000 claimants.

Sentiment: Neutral