According to a source, Alex Mashinsky, the former CEO of Celsius, was arrested on Thursday for federal securities fraud charges. This development occurred as the bankrupt cryptocurrency exchange agreed to a settlement of $4.7 billion with government regulators.

In addition to the charges filed against the exchange by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for conspiring to defraud investors out of billions, the Federal Trade Commission (FTC) also brought charges against Celsius and Mashinsky. The $4.7 billion settlement is one of the largest in the FTC's history, coming close to the record-setting $5 billion fine imposed on Meta in 2019. The settlement underscores the FTC's assertion of repeated deceitful actions by Celsius and Mashinsky.

Federal prosecutors have levied charges against Mashinsky, including securities fraud, commodities fraud, wire fraud, securities manipulation, and various fraud charges. If convicted, both Mashinsky and a co-defendant named Roni Cohen-Pavon could face substantial prison sentences.

Mashinsky pleaded not guilty to the fraud charges in a federal court in New York.

According to the charging document from federal prosecutors, Mashinsky allegedly misrepresented several aspects of Celsius's operations, such as the safety of its yield-generating activities, the company's profitability, the long-term sustainability of its high rewards rates, and the risks associated with depositing cryptocurrency assets with Celsius.