Former Celsius CEO's Lawyers Seek Dismissal of Fraud and Manipulation Charges
Summary:
Legal representatives for the former CEO of Celsius, Alex Mashinsky, have lodged a request in federal court to dismiss two of his seven felony charges related to commodities fraud and market manipulation. The legal team also asked that information about Celsius' bankruptcy be excluded from the case. Mashinsky currently remains free on a $40 million bail. The case comes as U.S. law enforcement agencies continue to intensify measures against crypto-related crimes.
Legal counsel for ex-Celsius CEO Alex Mashinsky have petitioned in a federal court for charges relating to commodities fraud and market manipulation to be dismissed. On January 12, in a submission to the U.S. District Court for the Southern District of New York, Mashinsky's lawyers moved to have two felony charges that their client is expected to face at his 2024 trial dropped. Per the submission, the legal team argue that the second count of commodities fraud goes against, and contradicts, the first count of securities fraud, based on how crypto is treated by the government. The document states that it's illogical and inconsistent to consider the Earn Program as a security under Count One, and a commodity under Count Two.
The submission also suggests uncertainties over whether the government plans to argue that Celsius's Earn Program amounted to both the purchase of a security and the sale of a commodity concurrently. It concludes that the government can't simultaneously argue two opposing points, therefore, one count should be dismissed.
The legal team also challenged the sixth count of market manipulation, arguing for a dismissal citing lack of fair warning. They stated the U.S. government has seemingly invented a criminal charge for a civil offense. In addition to this request to have two out of seven criminal charges against the ex-CEO dropped, they also proposed that any information about Celsius's bankruptcy should not be included in the case.
Celsius, along with other crypto firms like BlockFi and FTX, declared bankruptcy in the U.S. in 2022 due to a dip in the marketplace. Mashinsky resigned from his CEO position in September 2022 and was subsequently charged with seven felonies, including securities fraud, wire fraud and conspiracy to commit fraud, in July 2023. Though indicted, Mashinsky is free on a $40 million bail.
Crypto industry heavyweight, ex-FTX CEO Sam Bankman-Fried, has been found guilty of seven felonies and is awaiting sentencing. Former Binance CEO Changpeng Zhao pled guilty to one felony under a deal with U.S. authorities. Until his sentencing that's scheduled for February, he is not allowed to leave U.S. territory. In the meantime, U.S. law enforcement agencies are escalating their action on crypto-related crimes.
Published At
1/15/2024 7:32:52 PM
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