Former Celsius Network CEO Alex Mashinsky was released on $40 million bail on July 13, the same day he was arrested after being charged with multiple counts of fraud, according to a CNN report.

Mashinsky’s lawyer, Jonathan Ohring, told CNN that the former CEO “vehemently” denies all the charges and intends to fight them “vigorously” in court.

Bail was secured through Mashinsky’s residence in Manhattan, New York, which is currently valued at $40 million.

widespread fraud

Federal prosecutors charged Mashinsky after an investigation into the Celsius Network collapse uncovered evidence it claims to be widespread fraud. He also faces charges from the SEC, the CFTC and the FTC.

The indictment filed in New York alleges that the former CEO misled and “frauded” clients into depositing their assets under the guise of operating a cryptocurrency lender.

According to the fillings:

“Mashinsky operated Celsius like a risky mutual fund, taking money from clients under false and deceptive pretenses and turning clients into unwitting investors in a far riskier and far less profitable business than Mashinsky had portrayed.”

The charges against the former CEO include securities fraud, wire fraud and commodity fraud.

Additionally, Mashinsky and former Celsius Network chief revenue officer Roni Cohen-Pavon are also accused of manipulating the price of the network’s native token, CEL, in an effort to sell it at higher prices.

Crackdown on crypto fraud

The indictment against Mashinsky is the latest in a series of moves by regulators and law enforcement to crack down on fraud in the crypto industry.

High-profile implosions in the sector during 2022, such as FTX and Celsius, have caused the public to question the adequacy of laws and regulatory oversight in recent months.

In turn, politicians are urging regulators and law enforcement to take a more proactive approach to restoring confidence in the system. Lawmakers are also working to establish a proper framework for the crypto industry to ensure that the sector can come under the regulatory umbrella.

Part of the effort by lawmakers is aimed at improving clarity around the age-old question of whether or not a cryptocurrency is a security, which seems to be the crux of many of the industry’s regulatory woes.

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