Alex Mashinsky, co-founder and former CEO of insolvent crypto lender Celsius, was arrested on Thursday following an investigation into the company’s collapse, according to Bloomberg, citing a person familiar with the matter. The U.S. Securities and Exchange Commission (SEC) accused the firm and Mashinsky of securities fraud in a lawsuit filed on the same day, with lawsuits from the Commodity Futures Trading Commission (CFTC) and Federal Trade Commission (FTC) immediately following.
New York Attorney General Letitia James filed a suit against Mashinsky earlier in the month, accusing him of misleading investors about the firm’s health. The SEC’s complaint asserts that Celsius’ token CEL and its Earn Interest Program are securities, saying “In this case, Celsius offered and sold CEL and the Earn Interest Program as securities… Celsius and Mashinsky never filed a registration statement or had one in effect with the SEC for their offers and sales of securities through the Earn Interest Program.”
Celsius filed for bankruptcy last July, and crypto consortium Fahrenheit recently won a bid to acquire its assets. Celsius and SEC did not immediately respond to a CoinDesk request for comment.
Alex Mashinsky, Former CEO of Celsius, Arrested Following Investigation into Company’s Collapse
