Until the trial proceeds next September 2024, Mashinsky will remain free on $40 million bail, however, will continue to face travel and financial restrictions.
In an October 3rd hearing held in the United States District Court for the Southern District of New York, Judge John Koeltl set the criminal trial date for former Celsius Network CEO Alex Mashinsky for September 17, 2024. The legal proceedings will also involve three pretrial conferences scheduled for March, July, and September.
Throughout this period, Mashinsky, who is facing allegations of misleading Celsius investors and defrauding users, will remain free on a $40 million bail, albeit with significant travel and financial transaction restrictions. Additionally, in a September ruling, the court froze several of Mashinsky’s assets, including bank accounts and property.
Celsius Network filed for bankruptcy last year and currently holds substantial debts amounting to billions owed to its investors. In July, allegations were raised by prosecutors against both Alex Mashinsky and Celsius, suggesting they had artificially boosted the value of the company’s native token by utilizing customer funds.
Furthermore, they faced accusations of repetitive deceit towards their client base. In a related development, Roni Cohen-Pavon, Celsius’s Chief Revenue Officer, confronted criminal charges and reportedly entered a guilty plea just last month.
Last month in September, Roni Cohen-Pavon, Celsius’ former chief revenue officer, pleaded guilty to four criminal charges. Until the December sentencing hearing, Cohen-Pavon will be free on bail. He will also be available to testify in the Mashinsky trial next year.
Former Celsius CEO Mashinsky Faces Charges from the SEC and the CFTC
The Securities and Exchange Commission (SEC) filed a lawsuit against the cryptocurrency lending platform and its former CEO, alleging deceptive and unregistered sales of “crypto-asset securities.” Furthermore, the SEC accused both parties of misleading investors regarding Celsius’s financial status and manipulating the price of CEL, the company’s flagship token.
In parallel, the Commodity Futures Trading Commission (CFTC) also lodged fraud charges against Alex Mashinsky and the company. In response to these allegations, certain assets belonging to Mashinsky, including his Texas residence and holdings at prominent institutions such as Goldman Sachs, Merrill Lynch, and SoFi Bank, were subject to freezing orders.
Amidst the legal disputes, there is a glimmer of hope for Celsius’ creditors. They have approved a restructuring plan that ensures they will be compensated with major cryptocurrencies such as Bitcoin and Ethereum. Additionally, they will receive ownership stakes in a new corporate entity referred to as “NewCo”.