Celsius

Bitcoin

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    Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
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  <p class="has-drop-cap">Alex Mashinsky, co-founder and former Chief Executive of the <a href="https://tokenist.com/user-funds-likely-lost-as-celsius-network-declares-bankruptcy/" rel="noopener noreferrer nofollow" class="deco-link">imploded Celsius Network</a>, got arrested on Thursday, <a aria-label="Bloomberg reported (opens in a new tab)" href="https://www.bloomberg.com/news/articles/2023-07-13/sec-files-lawsuit-against-celsius-network-alex-mashinsky?in_source=embedded-checkout-banner" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Bloomberg reported</a>. The 58-year-old business executive and his collapsed crypto lending firm face a lawsuit from the US Securities and Exchange Commission (SEC) over securities fraud. The US DOJ, CTFC, and FTC also filed lawsuits against the former CEO.</p> 
  <h3 id="celsius-and-mashinsky-charged-with-securities-fraud">Celsius and Mashinsky Charged with Securities Fraud</h3> 
  <p>Celsius Network co-founder and former CEO Alex Mashinksy was arrested on Thursday after the SEC filed a lawsuit against the crypto lender, accusing it of securities fraud. According to Bloomberg, the Ukraine-born crypto entrepreneur was detained in the morning hours on July 13.</p> 
  <p>The move comes shortly after the SEC unveiled it has filed charges against Celsius, a crypto lending firm that collapsed last year due to insolvency. The report states that the criminal case is not public for now.</p> 
  <p>Earlier this month, Bloomberg reported that Celsius and Mashinsky may also <a aria-label="face legal action (opens in a new tab)" href="https://www.bloomberg.com/news/articles/2023-07-05/cftc-probe-concludes-crypto-lender-celsius-ex-ceo-mashinsky-broke-rules" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">face legal action</a> from the Commodity Futures Trading Commission (CFTC), another US financial regulator. The CFTC reported that the troubled crypto firm and Mashinsky violated US regulations by misleading investors.</p> 
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  <h3 id="celsius-bankruptcy-and-the-new-owner-of-crypto-lender-s-assets">Celsius Bankruptcy and the New Owner of Crypto Lender’s Assets</h3> 
  <p>The SEC’s lawsuit against Celsius Network comes exactly a year after the crypto lender declared bankruptcy after revealing a huge dent in its balance sheet caused by the <a href="https://tokenist.com/luna-drops-50-in-a-day-as-ust-peg-fails/" rel="noopener noreferrer nofollow" class="deco-link">catastrophic collapse</a> of the Terraform ecosystem in May 2022.</p> 
  <p>As a result, Celsius could not cope with a string of customer withdrawals, leading to a collapse. In its bankruptcy filing, the crypto lender reported it had between $1 billion and $10 billion in assets and liabilities and over 100,000 creditors.</p> 
  <p>The implosion led to a <a href="https://tokenist.com/wall-street-giants-battling-to-restart-celsius-with-50m-injections/" rel="noopener noreferrer nofollow" class="deco-link">bidding war</a> for the bankrupt Celsius Network between multiple Wall Street firms. In May 2023, it was revealed that the crypto consortium Fahrenheit won the battle to acquire the company’s assets.</p> 
  <p>Fahrenheit, the group of buyers that includes prominent firms such as venture capital (VC) investor Arrington Capital and miner US Bitcoin Corp, ousted <a aria-label="NovaWulf’s attempts (opens in a new tab)" href="https://www.reuters.com/technology/celsius-network-remains-open-other-bids-after-novawulf-offer-2023-03-08/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">NovaWulf’s attempts</a> to buy out Celsius, whose assets were previously valued at roughly $2 billion. Under the new deal, it was reported that the new entity would secure $450 million to $500 million in liquid crypto funds. At the same time, US Bitcoin Corp would build a set of crypto mining facilities, including a brand new 100-megawatt plant.</p> 
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  <p><em><strong>Do you think the latest lawsuit against Celsius could be another FTX-like case? Let us know in the comments below.</strong></em></p> 
  <p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/alex-mashinsky-arrested-as-several-agencies-sue-celsius-and-the-ex-ceo/">Alex Mashinsky Arrested as Several Agencies Sue Celsius and the Ex CEO</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>
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Alex Mashinsky Arrested as Several Agencies Sue Celsius and the Ex CEO

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