- Alex Mashinsky, former CEO of Celsius, seeks testimonies from six ex-employees in his fraud case.
- Mashinsky faces a potential 115-year prison sentence for allegedly defrauding customers and manipulating CEL token prices.
- Celsius declared bankruptcy in 2022 and is under SEC investigation for fraudulent activities.
Celsius founder and former CEO Alex Mashinsky is seeking testimonies from six former employees in his legal fight against fraud charges. These charges carry a potential 115-year prison sentence for allegedly defrauding customers and misleading them about Celsius Network’s financial health.
Defense Strategy and Key Witnesses
Mashinsky’s legal team is requesting the testimonies of key figures, including the former CFO and CRO. Notably, some potential witnesses, like Roni Cohen-Pavon, the former CRO, have already faced charges related to the case. Cohen-Pavon allegedly ignored Mashinsky’s instructions regarding CEL token transactions and pleaded guilty to his charges last year.
According to the memorandum, the defense argues that Mashinsky did not intend to harm anyone, claiming he relied on information provided by his experienced team. “As the CEO of Celsius, Mr. Mashinsky relied on the information provided by experienced Celsius experts around him,” the memorandum stated.
Indicting the CRO further, Mashinsky’s lawyers went on, saying, “Mr. Cohen-Pavon is a significant witness in the manipulation allegations as he provided legal advice to Celsius regarding CEL tokens’ trading from 2019 to 2022.”
Celsius Bankruptcy and SEC Lawsuit
Celsius Network filed for bankruptcy in 2022 and has since been embroiled in multiple legal battles. In July 2023, the Securities and Exchange Commission (SEC) sued Celsius and Mashinsky, alleging they raised billions through fraudulent and unregistered sales of cryptocurrencies.
Read also: Inside Celsius’ Legal War: Why the Bankrupt Lender is Targeting Its Own Users
The SEC also accused them of lying to investors about Celsius’ financial condition and manipulating the price of CEL, the company’s native token. However, the defense argues that Cohen-Pavon acted independently in these transactions, and Mashinsky should not be held solely accountable.
Mashinsky’s Defense: Reliance on Team and Reviews
During an “Ask Mashinsky Anything” session, Mashinsky’s lawyers claimed that legal and risk teams reviewed and edited the transcripts without his knowledge. They argue that Mashinsky relied on these reviews to correct any inaccuracies in good faith.
However, the defense contends that many corrections were made without his awareness, suggesting that any misleading statements were unintentional rather than fraudulent and that he acted based on the information provided to him.
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