Alex Mashinsky, the former CEO of the defunct Celsius Network, has failed to get two fraud charges dismissed from his indictment.
A federal judge in New York ruled against Mashinsky’s motion, which alleged he manipulated the price of Celsius’s cryptocurrency, CEL token, by artificially inflating it, per Bloomberg Law.
Mashinsky argued that certain charges were redundant and legally flawed, asserting that his conduct couldn’t simultaneously violate both the Commodity Exchange Act and the Securities Exchange Act.
However, Judge John G. Koeltl rejected this, stating that each charge can stand on its own under the law.
One dismissed argument focused on whether Celsius’s deposit program qualified as a commodity contract, offering “rewards” to investors who deposited Bitcoin (BTC). The judge ruled that this question could be better addressed later in court.
Celsius’s 2022 collapse
Mashinsky faces charges of wire fraud and market manipulation linked to Celsius’s 2022 collapse.
Celsius was once a prominent crypto lender. However, it collapsed in 2022 after freezing customer withdrawals and filing for bankruptcy amid a massive balance sheet deficit.
Prosecutors allege that Mashinsky misled investors and manipulated the company’s native token, CEL, claiming it was safer than it was.
Mashinsky faces trial in New York on seven criminal charges, including fraud, which could lead to a 115-year prison sentence if convicted. The trial began in September
His case follows the high-profile conviction of FTX founder Sam Bankman-Fried, who was sentenced to 25 years in prison for similar charges.
