Former Celsius Network’s CEO Alex Mashinsky is set to face criminal trial starting from September 17, 2024.
During an October 3 hearing in the United States District Court for the Southern District of New York, Judge John Koeltl confirmed that Mashinsky’s fraud trial is scheduled for September 2024. The court also scheduled three pretrial conferences for March, July, and September.
In July, Alex Mashinsky faced charges of securities fraud, commodities fraud, wire fraud, and conspiracy linked to Celsius token manipulation. This recent hearing represents one of the initial developments in Mashinsky’s criminal case since his July arrest.
Notably, prosecutors believe that the former CEO reaped about $42 million from his sales prior to Celsius’ collapse. He will continue to be free on $40 million bail during the legal proceedings. However, his travel and specific financial transactions will be mostly under surveillance.
Accusations Against Mashinsky
Celsius Network, burdened with more than $1 billion in debt, filed for bankruptcy in July 2022. The U.S. Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) settled with the company in July. However, they, along with the Federal Trade Commission (FTC), still have pending cases against Mashinsky, who resigned as CEO in September 2022.
Related reading : Celsius Faces SEC Backlash Over Bankruptcy Plan
Authorities allege that Mashinsky misled Celsius investors and defrauded users of billions of dollars. In September, the court froze several of his assets, including bank accounts and property.
Last month, Roni Cohen-Pavon, a former high-ranking executive at Celsius Network, pleaded guilty to criminal charges against him. Interestingly, he has agreed to cooperate with prosecutors in their case against Alex Mashinsky.
Exploring Digital Assets as “Security”
In a recent hearing before the U.S. District Judge John Koeltl, Mashinsky’s defense team hinted at debating whether “crypto tokens” qualify as a security. Defense attorney Robert Frenchman stated:
“The law about what is a security is fluid and the definition of a security is evolving.”
On a different note, SEC Chairman Gary Gensler recently stated that “crypto tokens” are not security. On September 27, during his testimony at the House Financial Services Committee, he noted:
“Crypto tokens are really quite something different. They’re not a currency. They don’t fulfill the three functions of a currency, of a store of value, a unit of account, a medium of exchange. They might, maybe, another day but not in 2023.”
The first week of October marked the commencement of another high-profile court case in the digital asset industry. On October 3, Jury selection began for the criminal trial of former FTX CEO Sam Bankman-Fried.
