Celsius CEO Arrested In Wake Of Crypto Lender's Collapse, SEC Files Securities Fraud Lawsuit

The former CEO and co-founder of the now-defunct cryptocurrency lender Celsius CEL/USD, Alex Mashinsky, was taken into custody on Thursday.

This arrest comes in the wake of a Department of Justice inquiry into the downfall of the company, Bloomberg reported, quoting sources.

The Securities and Exchange Commission filed a concurrent lawsuit against Mashinsky and Celsius, alleging securities fraud.

The Commodity Futures Trading Commission and Federal Trade Commission promptly followed with their own legal actions.

Earlier this month, the CFTC concluded an investigation, finding that Celsius and Mashinsky violated regulatory guidelines by providing investors with misleading information.

This could potentially lead to another lawsuit against the former CEO and the company.

Celsius was among several prominent cryptocurrency companies that went under last year.

The firm had gained a reputation for offering high interest rates on deposits of digital assets.

The collapse of the TerraUSD LUNA/USD stablecoin and a downturn in the digital-asset markets left Celsius with a significant deficit in its balance sheet, rendering it unable to handle a surge in customer withdrawal requests.

Earlier this month, New York Attorney General Letitia James brought a lawsuit against Mashinsky, accusing him of deceiving investors about the company's financial status.

The SEC's complaint alleges that Celsius' token CEL and its Earn Interest Program are securities.

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