Fraud Trial Of High-Profile Crypto Executive Set For September 2024

As disgraced crypto mogul Sam Bankman-Fried appeared in court on the first day of his trial Tuesday, Alex Mashinsky, the former CEO of the now-bankrupt crypto lending firm Celsius, also got his trial date, which is set for Sept. 17, 2024.

Mashinsky's legal team has nearly a year to prepare for the trial of the former Celsius founder and CEO on criminal fraud charges linked to the billion-dollar collapse of the crypto lending platform.

U.S. 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.

During the hearing, Mashinsky's lawyers hinted at their defense strategy, which involves identifying whether a cryptocurrency is a security, Bloomberg reported.

Defense attorney Rober Frenchman said, "The law about what is a security is fluid."

Mashinsky was sued in July for securities fraud, commodities fraud, wire fraud and conspiracy to manipulate the value of the Celsius token. His criminal fraud case was handled by the U.S. Attorney's Office for the Southern District of New York.

Celsius filed for bankruptcy last year with over $1 billion in debt.

Mashinsky also faces a civil fraud case from the New York Attorney General's Office.

The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also filed civil charges against the ex-Celsius CEO over fraudulent and unregistered securities activities. The agencies alleged that Mashinsky and Celsius manipulated markets and consistently lied to customers.

He was arrested on July 13 and was released on a $40 million bail the next day. His assets were frozen in August.

Last month, Mashinsky filed a motion to have the Federal Trade Commission (FTC) drop its case against him.

"The allegations do not support a claim that Mashinsky knowingly made a misstatement to fraudulently obtain customer information from a financial institution," which is required under a 1999 law, known as the Gramm-Leach-Bliley Act, his lawyers said in a court filing.

His camp requested the court to "grant Mashinsky's motion and dismiss the complaint against him in its entirety."

Mashinsky's co-defendant and former Celsius chief revenue officer Roni Cohen-Pavon last month pleaded guilty to four criminal charges, which include manipulation of the exchange's crypto token Cel, securities fraud and wire fraud, before Manhattan District Court Judge Koelti.

The former Celsius CRO also agreed to help the U.S. Attorney's Office and the FBI with their ongoing investigations and to testify in court if needed, his plea agreement showed.