As Sam Bankman-Fried appeared in court on Tuesday to face criminal charges, Alex Mashinsky, the former CEO of the now-bankrupt lending firm Celsius, had his trial date set for September 17, 2024.
Mashinsky’s legal team has a year to prepare for the criminal trial built around fraud charges concerning the billion-dollar implosion of the lending firm.
US District Court Judge, John Koeltl, confirmed the schedule during a hearing Tuesday and added there will be three pretrial conferences – scheduled for March, July and September.
In the hearing, Mashinsky’s lawyers indicated their defence strategy, which involves identifying which cryptocurrencies and tokens are securities, per Bloomberg.
Rober Frenchman, a defence lawyer, said “the law about what is a security is fluid”.
Last year, Celsius filed for bankruptcy with over $1 billion in debt.
In July, Mashinsky was sued for securities fraud, commodities fraud, wire fraud and conspiracy to manipulate the value of the Celsius token. The criminal case was handled by the US Attorney’s Office for the Southern District of New York.
Mashinsky also faced a civil fraud case from the New York Attorney General’s Office.
A Commodity Futures Trading Commission (CFTC) investigation found congruence with an independent examiner’s report released in February, highlighting damning revelations that date back to at least 2020. In the 476-page document, the examiner found that Celsius insiders knew about illegal activities, and some employees withdrew large chunks of tokens before the firm’s eventual collapse.
Civil charges by both the Securities and Exchange Commission (SEC) and the CFTC were filed against the ex-Celsius CEO over fraudulent and unregistered securities dealings. The two agencies alleged market manipulation and consistent lying to customers.
Celsius employee Johannes Treutler confessing internally on October 15, 2020, that Alexander @Mashinsky was dumping CEL on the Celsians community on Uniswap and that he was breaching their trading policy… every day. pic.twitter.com/OKKK9ju72L
— Celsius NewCo Community (@CelsiusNewCo) September 29, 2023
On July 13, Mashinsky was arrested and released on a $40 million bail the next day, with his assets being frozen in August.
In September, Mashinsky’s lawyers filed to have the Federal Trade Commission (FTC) case against him dropped.
In a court fling, his lawyers said: “the allegations do not support a claim that Mashinsky knowingly made a misstatement to fraudulently obtain customer information from a financial institution.”
Meanwhile, Mashinsky’s former Chief Revenue Officer and co-defendant, Roni Cohen-Pavon, pleaded guilty to four criminal charges last month. Charges include $CEL token manipulation, securities and wire fraud.
CRYPTO CRIMES: #Celsius‘ Mashinsky Co-Defendant Pleads Guilty Now Cohen-Pavon To Be Sentenced Dec 11 – Inner City Press story: https://t.co/YxpFzjHd4h pic.twitter.com/Njy5JOsmaw
— Inner City Press (@innercitypress) September 14, 2023
The former Celsius c-level agreed to help the US Attorney’s Office and the FBI with ongoing investigations, and to testify in court if need be.
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