Bank accounts and real estate assets linked to former Celsius CEO Alex Mashinsky have been frozen as the U.S. Department of Justice’s (DOJ) criminal case against the crypto executive continues.
A court order, which was unsealed on Sept. 5, shows a federal judge signing off on a restraining order linked to Mashinsky’s assets.
“The Government sought sealing of the order to avoid any third parties interfering with the execution of the order before the relevant institutions could be notified and accounts could be frozen,” said Damian Williams, a U.S. attorney in the Southern District of New York, in the filing.
“The relevant institutions are now aware of the Order, and we do not believe that further sealing is required,” he added.
Bank accounts held at Goldman Sachs, Merrill Lynch, First Republic Securities and SoFi Bankare are included within the order along with Mashinsky’s residential home in Texas.
The financial institutions were required to immediately terminate all transfers out of those accounts upon notice of the order, which was signed by U.S. District Judge Jed Rakoff.
Mashinsky became the subject of a criminal case in July when he was arrested by US authorities and charged with fraud and market manipulation. He pleaded not guilty to all charges and was released on bail, secured by a $40 million bond.
On the same day, Mashinsky and his company Celsius faced separate actions from the U.S. Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC). Allegations in the lawsuits included fraud and the sale of unregistered securities, as well as other charges.
Celsius filed for bankruptcy in July last year as the crypto market entered a deep bear market following the collapse of crypto hedge fund Three Arrows Capital and the Terra ecosystem. A 476-page examiner report in the bankruptcy proceedings showed that Celsius’s problems started as early as 2020 and that the firm was using customer funds to prop up the price of its token CEL. This strategy was referred to as “the OTC flywheel.”
The Department of Justice’s case against Mashinsky is one of several cases underway against crypto executives. Crypto exchange FTX founder Sam Bankman-Fried will go to trial on Oct. 2 facing charges related to securities fraud, wire fraud and conspiracy to commit money laundering, among others. Bankman-Fried has also pleaded not guilty to all charges.