• The US Securities and Exchange Commission (SEC) has filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky for violating several laws.
• Alex Mashinsky was arrested on Thursday morning, and will be arraigned on Friday.
• After the news broke of the SEC lawsuit, the price of Celsius Network’s native token CEL dropped significantly.
US SEC Files Lawsuit Against Celsius
The US Securities and Exchange Commission (SEC) has filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky for violating several laws prior to the company’s collapse in 2022. Bloomberg reported that specifics of the complaint were not immediately available but came days after the Commodity Futures Trading Commission (CFTC) determined that both parties had broken multiple American regulations before their downfall.
Alex Mashinsky Arrested
Alex Mashinsky was arrested on Thursday morning as part of an investigation into the company’s collapse despite denying any wrongdoing. He will be arraigned in court on Friday, July 14th. The New York Attorney General Letitia James sued him earlier this year, claiming he made numerous false and misleading statements which resulted in investors losing billions of dollars.
Celsius Chapter 11 Bankruptcy Proceedings
Celsius is currently going through a Chapter 11 bankruptcy proceeding with $167 million in cash reserves to support operations during this restructuring process. The money will enable Celsius to support “certain operations during the restructuring process,“ according to the company itself.
Impact On CEL Price
Just as when CFTC announced its findings last week, news of the SEC lawsuit triggered a sharp drop in CEL’s price – trading at $0.1543 at press time – down 3.74% over 24 hours and hitting a daily low of $0.1486 after it broke out today .
Conclusion
Celsius Network is facing legal action from two government agencies due to violations of multiple US regulations before their collapse last year, with their former CEO Alex Mashinsky being detained by authorities following an investigation into his alleged misdeeds leading up to it. The price of CEL has taken another hit as a result but Celsius still holds significant funds which may help them weather this latest storm while they go through Chapter 11 proceedings .