Former Celsius CEO Requests Court Approval to Preserve Testimonies of Material Witnesses in Fraud Case
On Saturday, September 14, 2024, Alexander Mashinsky, former CEO of cryptocurrency-based finance platform Celsius, filed a memorandum in support of his motion to preserve the testimony of six material witnesses residing outside the United States. The motion, submitted to the U.S. District Court for the Southern District of New York, is part of an ongoing legal battle in which Mashinsky faces multiple charges, including fraud and market manipulation.
The court document outlines the charges against Mashinsky, including three counts of fraud and four counts of market manipulation. The fraud allegations state that Mashinsky misled customers about the success of Celsius’s initial coin offering (ICO) in 2018, falsely claimed profitability, and misrepresented the company’s revenue-sharing practices. The market manipulation charges assert that he orchestrated a scheme to artificially inflate the price of Celsius’s proprietary token, CEL, through undisclosed purchases in the open market.
Mashinsky’s legal team argues that the testimonies of the proposed witnesses are crucial for his defense, as they were allegedly involved in the management decisions and operations at Celsius. The memorandum claims that the witnesses are unavailable for cross-examination due to their locations outside the U.S., which raises concerns about the fairness of the trial. The defense contends that the testimonies would provide evidence that contradicts the government’s claims and supports Mashinsky’s assertion of his innocence.
The memorandum details the backgrounds of each proposed witness. Roni Cohen-Pavon, the former outside and in-house counsel for Celsius, is identified as a key figure in the alleged market manipulation scheme. The defense argues that Cohen-Pavon’s legal advice shaped Celsius’s purchasing strategies and that he failed to correct inaccuracies in Mashinsky’s public statements, despite being aware of the issues.
Daniel Leon, co-founder of Celsius and former President, is also named as a critical witness. The defense claims that Leon participated in executive discussions regarding the company’s token purchases and was involved in decisions that allegedly disregarded Mashinsky’s instructions.
Johannes Treutler, a former Senior Token Analyst, is mentioned as having significant insight into Celsius’s token purchases. The defense asserts that Treutler’s actions align with company policies prior to 2021, after which he allegedly deviated from those practices under the influence of other executives.
Ron Sabo, who managed Celsius’s CEL token purchases, is highlighted for his role in executing transactions that reportedly contradicted Mashinsky’s directives. His testimony is considered essential for understanding the internal decision-making processes at Celsius during the relevant time period.
Yaron Shalem, the former Chief Financial Officer of Celsius, is also included in the list of witnesses. The defense claims that Shalem’s financial reporting practices may have obscured critical information regarding the company’s trading activities.
The memorandum emphasizes the high stakes involved in the case, noting that the government has indicated potential sentencing guidelines that could result in a prison term of up to 115 years for Mashinsky. The defense argues that such a severe penalty underscores the importance of allowing Mashinsky to present a robust defense, which includes the testimonies of the proposed witnesses.
Mashinsky’s legal team asserts that the government has not provided sufficient justification for opposing the motion, further claiming that the materiality of the proposed witnesses is evident from the discovery evidence already presented in the case.
Please contact BlockTribune for access to a copy of this filing.
