KEY POINTS
- Mashinsky stepped down from his post as CEO in September 2022
- He was indicted with seven felony counts, including securities fraud, conspiracy to commit fraud and wire fraud in July 2023
- Mashinsky's trial is set in September 2024
Alex Mashinsky, previously at the helm of the now-bankrupt crypto lending company Celsius, found himself entangled in a challenging legal situation. As he petitioned for the court to dismiss two charges against him, Yankwitt LLP, the New York-based trial and litigation firm representing him allegedly submitted a motion to withdraw its representation citing non-payment.
In a legal document submitted to the United States District Court for the Southern District of New York on January 12, Mashinsky's defense team filed a motion seeking the dismissal of two felony counts the former CEO will likely face in his September 24 trial.
Mashinsky's lawyers argued that the second count of commodities fraud was not consistent with the first count of securities fraud based on the government's approach to crypto.
"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," the filing read. "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."
Moreover, the lawyers asked the court to drop count six of market manipulation because of lack of fair notice and accused the U.S. government of inventing the criminal offense.
Further, Mashinsky's lawyers asked that "References 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."
Celsius was one of the several crypto businesses that filed for bankruptcy in 2022.
Mashinsky stepped down from his post as CEO in September 2022 but was indicted with seven felony counts, including securities fraud, conspiracy to commit fraud and wire fraud in July 2023.
Aside from his indictments, Mashinsky is allegedly losing the Yankwitt LLP law firm in his defense team after it applied to withdraw its representation because of the crypto executive's alleged "deliberate disregard" to pay, based on the images circulating online.
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— Crypto News (@CryptoNewsXP) January 15, 2024
"The current application to withdraw is being made due to Defendant's failure to meet the obligation set forth in his retention agreement with the Firm to timely pay legal fees billed by the Firm, despite numerous requests by the Firm," the filing read.
"Defendant's deliberate disregard of his agreement to pay his legal fees is sufficient grounds for the Firm's withdrawal from the representation," the filing added.
International Business Times could not independently verify the authenticity of the images. We have contacted Yankwitt LLP for an official statement to confirm the authenticity of images circulating online, which purportedly depict the firm's application to withdraw its legal representation.
This article will be updated following response from Yankwitt LLP.
