Celsius founder pleads not guilty to crypto fraud

STORY: The founder and former boss of bankrupt cryptocurrency lender Celsius Network pleaded not guilty to fraud charges in the United States on Thursday.

Alex Mahinsky, seen here speaking to Reuters in January 2021, denied he misled customers and artificially inflated the value of his company's propriety crypto token.

He’s been charged with seven criminal counts - including securities fraud, commodities fraud and wire fraud.

That’s according to an indictment unsealed earlier on Thursday.

Celsius was among the first in a series of bankruptcies in crypto last year.

Those came as token prices cratered amid rising interest rates and stubbornly high inflation.

That prompted a surge of customers across the sector rushing to withdraw deposits, with Celsius following the other bankruptcies including Singapore-based crypto hedge fund Three Arrows Capital and rival crypto lender Voyager Digital.

It was a spectacular downfall for many in the sector, and came barely a year after Mahinsky had made this claim to Reuters.

(SOUNDBITE) (English) CELSIUS, CO-FOUNDER, CEO, ALEX MASHINSKY, SAYING:

"Behind all of this, there is a community of millions of people, hundreds of millions of people who actually is focused on building the future of finance and making sure that that will be acting in your best interest.”

Mahinsky is one of several crypto moguls to be indicted.

The most high-profile is the founder of crypto exchange giant FTX.

Sam Bankman-Fried, or SBF as he’s known, was charged with fraud last year and has also pleaded not guilty.

Last month a judge turned down SBF’s push to dismiss most of the criminal charges against him.

Mahinsky is also being sued by three federal regulation authorities, including the Securities and Exchange Commission.

That comes amid broader action against crypto firms by the SEC, which is also suing crypto exchanges Coinbase as well as industry leader Binance and its founder Changpeng Zhao.