Attorneys for former Celsius CEO Alex Mashinsky submitted an application to the federal court asking the judge to discharge the allegations against him for market manipulation and commodities fraud.Mashinsky’s defense team filed a move to dismiss two felony offenses in which the former Celsius CEO is expected to stand trial in September 2024 on January 12 in the United States District Court for the Southern District of New York.The lawsuit said that because of how the government has handled cryptocurrencies, the second offense of commodities fraud was “repugnant” and “inconsistent” with the first count of securities fraud.
“It is inconsistent and illogical to view the Earn Program as a security for purposes of Count One, and a commodity for purposes of Count Two,” said the filing. “It is not clear if the government intends to argue that Celsius’s Earn Program constituted the purchase of a security and the sale of a commodity at the same time […] the government cannot have it both ways and the appropriate remedy is dismissal of one of the counts.”
Also, Mashinsky’s attorneys contended that the U.S. government “invented[ed]” a criminal charge for a civil infraction, and that the court ought to dismiss count six of market manipulation “for lack of fair notice.”The former CEO’s legal team requested that the following be excluded from the case in addition to asking the judge to dismiss two of the seven criminal allegations against him.
“[R]eferences to Celsius’s bankruptcy should be stricken from the Indictment. For the same reasons, the government should be precluded from introducing evidence of the Celsius bankruptcy during trial.”
FTX, BlockFi, and Celsius were just a few of the cryptocurrency companies that declared bankruptcy in the US in 2022 during a bear market.After leaving his position as CEO in September 2022, Mashinsky was charged with seven felonies in July 2023, including conspiracy to commit fraud, securities fraud, and wire fraud.As of the time of publication, Mashinsky was free on a $40 million bail. Another well-known person in the cryptocurrency world, Sam Bankman-Fried, the former CEO of FTX, was found guilty in November 2023 of seven felonies and is awaiting sentencing.As part of a deal with US authorities, former Binance CEO Changpeng Zhao entered a guilty plea to one count of felony.Until his sentence in February, he is not allowed to leave the country.