Alex Mashinsky, the former CEO of Celsius, has had his assets frozen by a United States court, including bank accounts and property, following a motion from the United States Justice Department.
Mashinsky was arrested in July and is facing civil and criminal charges stemming from his involvement with the now-defunct Celsius.
Mashinsky’s Assets Frozen
The decision by a US court is part of an ongoing criminal investigation into Mashinsky, headed by the United States Department of Justice (DOJ). Among the frozen assets are several corporate bank accounts and a property located in Texas, all of which are now rendered untouchable. According to a filing filed on the 5th of September in the United States District Court of New York, the judge signed off on a request to unseal a restraining order. This order was linked to Mashinsky’s assets.
Following the decision, the Justice Department froze accounts at Goldman Sachs and Merrill Lynch under the names of holding companies. It also froze accounts at First Republic Securities and SoFi Securities, which were held under Mashinsky’s name. The order also included Mashinsky’s property in Texas, purchased with his wife in 2021. The house was listed for sale for over a year, at the same time when Celsius filed for bankruptcy.
Mashinsky’s Spectacular Fall
US authorities arrested Mashinsky in July. Authorities alleged that the former Celsius CEO misled investors and defrauded users and investors out of billions of dollars. Mashinsky has pleaded not guilty to all charges, calling the allegations against him unfounded, and was released on a $40 million bail. However, the bail had several conditions and restrictions, such as electronic monitoring. Additionally, Mashinsky is also prohibited from withdrawing, transferring, or receiving more than $ 1,000 without prior approval from the concerned authorities and court.
The Commodity Futures Trading Commission (CFTC) and the United States Securities and Exchange Commission also filed civil cases against Mashinsky in July. The Federal Trade Commission has also issued a staggering $4.7 billion fine on Celsius, stating that the company allegedly duped users. However, it later suspended the order to allow Celsius to use its assets as part of its ongoing bankruptcy proceedings.
CEL Token Registers Drop
Authorities alleged that Mashinsky presented Celsius as an alternative to banking where users could deposit crypto and earn interest. Celsius also allegedly employed customer funds to inflate the market for its native CEL token artificially. This allowed the firm to offload its CEL holdings at a price higher than the token’s actual value.
Celsius is currently under the management of a restructuring team headed by ex-JPMorgan Chase banker Chris Ferraro. Celsius has already acknowledged its role in the scam, according to a non-prosecution agreement with the United States Department of Justice. Following the news of the seizure, the CEL token registered a considerable drop. The token is currently trading at $0.1349.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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