A U.S. federal judge has denied Alex Mashinsky's request to dismiss two fraud charges related to his manipulation of the CEL token while CEO of Celsius Network.
Charges Against Alex Mashinsky
Mashinsky faces seven criminal charges for allegedly manipulating the CEL token, misleading investors, and damaging the company's reputation. He is also accused of falsely promoting the platform's safety despite knowing its risks. If convicted, he could face up to 115 years in prison.
Court Decision and Its Implications
On November 8, U.S. District Judge John G. Koeltl rejected Mashinsky's dismissal arguments, highlighting the merit of the charges. The judge noted that each charge could be considered separately, meaning one conviction wouldn't cancel out the others. Mashinsky claimed that Celsius's deposit program didn’t qualify as a commodity contract under U.S. law, but this issue is set to be addressed at trial.
Impact of Celsius Network's Bankruptcy
Celsius Network was a key player in the crypto lending market, offering users a chance to earn interest on cryptocurrency deposits. However, a liquidity crisis in 2022 led to its bankruptcy and a freeze on withdrawals. Prosecutors allege Mashinsky's misleading actions harmed customers who trusted the platform's assurances.
Mashinsky's case parallels other major crypto fraud cases. His trial underscores the importance of transparency and accountability among crypto executives.
