Vanessa
A federal judge in New York has denied former Celsius Network CEO Alex Mashinsky’s motion to dismiss two fraud charges, allowing allegations of price manipulation involving the company’s CEL token to proceed.
In a ruling dated November 8, 2024, Judge John G. Koeltl of the U.S. District Court for the Southern District of New York rejected Mashinsky’s arguments that the charges were redundant and legally flawed.
Mashinsky contended that his alleged conduct could not simultaneously violate both the Commodity Exchange Act and the Securities Exchange Act. However, Judge Koeltl stated that each charge could independently apply under the law.
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The court also addressed whether Celsius’s deposit program, which offered “rewards” to investors who deposited Bitcoin, qualified as a commodity contract. Judge Koeltl deferred this question for further examination during the trial.
Mashinsky faces charges of wire fraud and market manipulation linked to Celsius’s collapse in 2022. Once a prominent crypto lender, Celsius froze customer withdrawals and filed for bankruptcy last year, revealing a substantial deficit. Prosecutors allege that Mashinsky misled investors and manipulated the value of the CEL token, falsely presenting it as safe.
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If convicted on all seven criminal charges, Mashinsky could face up to 115 years in prison. His trial commenced in September. This case follows the recent conviction of FTX founder Sam Bankman-Fried, who received a 25-year sentence for similar fraud and market manipulation charges.
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