Founder and Ex-CEO of Controversial Cryptocurrency Firm Celsius Network Arrested for Fraud

The founder and ex-CEO of controversial bankrupt cryptocurrency firm Celsius Network, in which the Caisse de depot has invested $200 million, was arrested on Thursday morning in New York, reports Reuters.

In total, the ex-partner of the Caisse Alex Mashinsky, 57, faces seven criminal charges, including several for fraud.

The US financial markets watchdog, the Securities and Exchange Commission (SEC), has also filed a lawsuit against him.

Crypto assets

“From March 2018 to June 2022, defendants Celsius Network Limited [Celsius] and its founder and CEO, Alexander “Alex” Mashinsky [Mashinsky]have raised billions of dollars from investors through unregistered and fraudulent offerings and sales of crypto asset securities,” the suit reads.

“The company engaged in risky business practices and made unsecured loans in an attempt to generate needed revenue, putting the entire Celsius business at risk,” it is alleged.

Another leader charged

Former Celsius chief financial officer Roni Cohen-Pavon faces four charges.

In recent years, the disputes with Celsius have caused a lot of ink to flow. His ex-chief financial officer was arrested by Israeli police et Ponzi fraud charges splashed the cryptocurrency firm associated with Quebecers’ woolen stockings.

One year ago, the CEO of the Caisse de depot et placement du Québec (CQCD) had made his mea culpa in the file.

“We decided to take it right away. [la radiation] as a precaution,” he said.

The Fund does not comment

Last year, The newspaper revealed that a Caisse de depot vice-president, Thomas Birch, once ran a company in which Celsius CEO Alex Mashinsky had invested.

“There was no real or apparent conflict of interest, and the process of analyzing the file followed its normal course”, had then assured the Journal Kate Monfette, Caisse spokesperson.

Asked by The newspaperthe Financial Markets Authority (AMF) indicated that it “continued to follow this file”.

The Caisse declined to comment on the matter.

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