Alex Mashinsky, founder and CEO of bankrupt cryptocurrency lender Celsius Network, has been detained on fraud charges.
In the statement made by the prosecutor’s office, it was reported that Mashinsky and his company, accused of fraud, were sued by 3 federal regulatory agencies.
According to the indictment, various accusations were made against Mashinsky, including securities and commodity fraud, while Roni Cohen-Pavon, one of the former executives of the company, was charged with 4 separate crimes.
The U.S. Securities and Exchange Commission (SEC), which sued the company, claimed that Mashinsky and Celsius had raised billions of dollars through the sale of unregistered crypto assets that he and the company had misled investors about the company’s financial success.
Other institutions that have sued Celsius and Mashinsky are the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Federal Trade Commission (FTC).
As the company lost millions of dollars and customers raced to withdraw funds, the then-CEO continued to claim Celsius was financially secure and had enough to cover withdrawals, accusations filed by regulators.
Celsius filed for bankruptcy protection in July last year after freezing customer withdrawals.