Mashinsky Files Application For Elimination Of Allegations Of Commodity Fraud And Market Manipulation

The lawyers representing Celsius's former CEO, Alex Mashinsky, filed a petition in federal court asking the judge to remove charges related to commodity fraud and market manipulation.

Lawyers representing former Celsius CEO Alex Mashinsky have filed a petition in federal court asking judges to remove charges related to commodity fraud and market manipulation.

In a January 12 filing at the United States District Court for the Southern District of New York, Mashinsky's legal team filed a request to reject two criminal charges that the former Celsius CEO will most likely face in a hearing in September 2024.

According to the filing, the second criminal charge related to commodity fraud was "ridiculous" and "inconsistent" with the first charges related to securities fraud based on the government's treatment of cryptocurrencies.

"It is inconsistent and illogical to see Earn Program as a security for the purpose of First Points, and commodities for the purpose of Second Points," the filing said. "It is unclear whether the government intends to argue that Earn Celsius Program is a purchase of securities and commodity sales at the same time [...] the government cannot choose both and the appropriate settlement is the rejection of one of the allegations."

Mashinsky's lawyers also argue that the court should reject the sixth allegations related to market manipulation "due to a lack of fair notice," stating that the US government "created" criminal offenses for civil offenses.

In addition to asking the judge to reject two of the seven criminal charges faced by the former CEO, the legal team also requested that information related to Celsius's bankruptcy not be included in this case.

"Referencing to Celsius's bankruptcy must be removed from the indictment. For the same reason, the government should be prohibited from presenting evidence of Celsius's bankruptcy during the trial," Mashinsky said.

Celsius is one of many crypto companies that filed for bankruptcy in the United States in 2022 amid market declines, including BlockFi and FTX. Mashinsky stepped down as CEO in September 2022 and was charged with seven criminal charges in July 2023, including securities fraud, wire fraud, and conspiracy to commit fraud.

Mashinsky remained free with a guarantee of $40 million at the time of publication of this news. Former FTX CEO Sam Bankman-Fried, another well-known figure in the crypto space, was found guilty of seven criminal charges in November 2023 and awaiting a verdict.

Former Binance CEO Changpeng Zhao has pleaded guilty to one criminal charge as part of an agreement with US authorities. He was barred from leaving the United States until his verdict in February