Former Celsius CEO Alex Mashinsky's Assets Frozen by Court Order

Former Celsius CEO Alex Mashinsky’s Assets Frozen by Court Order

Disclosure

Updated: 07 September 2023

The information provided on Inside Bitcoins is for educational and informational purposes only and should not be considered financial, investment, or trading advice. Cryptocurrency markets are highly volatile, and investing in digital assets carries significant risk. No profits are guaranteed, and you may lose some or all of your investment. Always invest responsibly and only with funds you can afford to lose.

Join Our Telegram channel to stay up to date on breaking news coverage

A court ordered the freezing of several bank accounts and properties owned by former Celsius CEO Alex Mashinsky, who faces seven charges of fraud.

A Sept. 5 court filing ordered the freezing of Mashinsky’s accounts at institutions including Goldman Sachs and Merrill Lynch. The now unsealed order was initially kept secret due to concerns that the accounts could be emptied before they were frozen.

The former CEO’s home in Austin, Texas, was also restrained under the court’s directive. The property had already been listed for sale through Zillow for about $2.49 million.

Cryptocurrency lender Celsius filed for bankruptcy in July 2022 after revealing its liabilities exceeded assets by $1.2 billion.

This Austin house is being sold by Alex Mashinsky, founder and CEO of bankrupt crypto company Celsius. He bought it only a year ago.https://t.co/TYbGmYEGq4 pic.twitter.com/7OACiuAwZN

— Austin Ideas (@atxideas) August 6, 2022

Celsius Co-Founder Faces Criminal Charges

The asset freeze comes as Mashinsky faces criminal charges for allegedly defrauding Celsius investors. In July, federal authorities arrested and charged him with fraud. They alleged that he deceived investors about Celsius’ financial stability and engaged in risky trading practices.

He was also accused of selling securities that weren’t properly registered, misleading investors, and falsely presenting the company as a secure alternative to traditional banking, all while personally profiting about $42 million from alleged price manipulation of Celsius’ native digital currency, CEL.

When I interviewed Celsius Founder Alex Mashinsky in 2021 about his crypto business, he tried to downplay the risks he was taking with customer funds.

I read his terms of service to him. And he still tried to say it wasn’t true. Now, he’s been arrested and charged with fraud. pic.twitter.com/V4pP95fL26

— Zack Guzmán (@zGuz) July 13, 2023

Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission filed civil lawsuits against Mashinsky.

As the bankruptcy case gained momentum, the Federal Trade Commission decided to postpone a $4.7 billion fine imposed on the company, as these funds were intended to be used to settle claims from creditors.

Prosecution Gathers Evidence

Mashinsky was granted bail at a sum of $40 million after he pleaded not guilty to what his lawyers describe as “baseless” charges. The prosecution requested six to eight weeks to assemble evidence for their case.