Seven charges were unveiled by the Federal prosecutors against the former CEO of Celsius, Alex Mashinsky, along with another key executive, Roni Cohen-Pavon, for alleged fraud and securities manipulation. The SEC announced simultaneous charges against the CEO and crypto exchange that is now bankrupted. The FTC has also demanded a $4.7 billion settlement, which, however, will not be paid unless all the creditors have been repaid within the bankruptcy proceedings.

The former CEO of Celsius, Alex Mashinsky, had been arrested on Thursday on the basis of federal security fraud charges as a source said the now bankrupt cryptocurrency exchange is supposed to pay a $4.7 billion settlement to the government regulators.

This exchange is also imposed by the SEC and CFTC, which had schemed to defraud investors out of billion-dollar investments. The settlement is, to date, one of the largest settlements for FTC, which is pretty close to the recorded $5 billion settlement against Meta in 2019 while highlighting what the FTC had described as “repeated deceptions” by Mashinky and Celsius.

Mashinky was also charged with commodities, securities, and wire fraud, along with multiple fraud and securities charges by the Federal prosecutors. In case of conviction, Mashinsky, as well as Roni Cohen-Paven, will face decades of prison sentence.

At the New York federal court, Mashinsky pleaded not guilty.

“Mashinsky misrepresented, among other things, the safety of Celsius’ yield generating activities, Celsius’ profitability, the longer sustainability of Celsius’ high reward rates, and the risks associated with depositing crypto assets with Celsius,” added federal prosecutors in a charging document.

However, the announced settlement is not to be paid until the company has repaid all the remaining customer assets during the bankruptcy proceedings.

The coinciding SEC proceedings are against Celsius and Mashinsky, where the alleged federal charges against Mashinsky are for misleading investors and fraudulently manipulating the Celsius exchange token pieces.

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