SUMMARY
- Former Celsius CEO Alex Mashinsky arrested on federal securities fraud charges
- Celsius agrees to pay an unprecedented $4.7 billion settlement with government regulators
- SEC and CFTC charge Celsius with defrauding investors and manipulating the market
In a major development, former CEO of Celsius, Alex Mashinsky, was apprehended on Thursday for federal securities fraud charges. This comes as the bankrupt cryptocurrency exchange reached a significant settlement of $4.7 billion with government regulators. The arrest and settlement have sent shockwaves through the financial world.
Moreover, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have also charged the exchange with a scheme to defraud investors, involving billions of dollars. The eye-popping settlement amount, nearing the record-breaking fine of $5 billion imposed on Meta in 2019, sheds light on the repeated deception orchestrated by Celsius and Mashinsky, as stated by the Federal Trade Commission (FTC).
Additionally, federal prosecutors have leveled charges against Mashinsky, including securities, commodities, and wire fraud. They have also accused him of various securities manipulation and fraud charges. If convicted, Mashinsky and his co-defendant, Roni Cohen-Pavon, may face decades in prison. These allegations reveal the gravity of the situation and the potential consequences awaiting the accused.
The charging document by federal prosecutors accuses Mashinsky of deliberately misrepresenting crucial aspects of Celsius, such as the safety of its yield-generating activities, profitability, long-term sustainability, and the risks associated with depositing crypto assets. The severity of these charges emphasizes the detrimental impact of Mashinsky's actions on unsuspecting investors.
While the $4.7 billion settlement has been announced by the FTC, it will not be paid until the company manages to return the remaining customer assets during the ongoing bankruptcy proceedings. The simultaneous SEC proceedings against Mashinsky and Celsius echo the federal charges, alleging that Mashinsky misled investors and engaged in fraudulent manipulation of Celsius' exchange token, CEL.
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