An Israeli judge revokes the gag command that reveals the arrest of Celsius Network's CFO

After a three-month media lock, an Israeli judge has allowed news organizations to report the arrest of a former manager of Celsius Network, a 19-billion dollar cryptocurrency lending.

When Yaron Shalem was arrested in the area of cryptocurrencies on November 18 in connection with alleged fraud, he was Celsius' head of finance, which pays high interest on Bitcoin and other digital coins.

On this day, an Israeli district court heard, as was arrested shortly after his landing at Ben Gurion Airport near Jerusalem by the Israeli special investigation unit Lahav 433, the equivalent of the country to the FBI.

At the time of the arrest of his financial officer, Celsius had just raised $ 400 million equity of investors, including Canada's second largest pension fund.

Alex Mashinsky, CEO of Celsius, said on November 24 that the company raised its financing round to $ 750 million in view of the question of investors. "We are pleased to involve other investors who will make Celsius stronger," he told the block works website.

In a statement on November 26,

Celsius said that "recently made aware of a police investigation in Israel in which an employee was involved", which it immediately suspended. The company said the investigation had nothing to do with Celsius itself. No misconduct in connection with Shalem's arrest was charged.

"We also checked that no assets were laid or handled incorrectly," added Celsius. The name of the employee was not mentioned in the declaration.

According to his LinkedIn profile,

Shalem came to Celsius in March 2021 and is known as a manager and investor in the Israeli tech start-up scene. He was one of ten arrested, including the owner of Israel's most famous football team, Beitar Jerusalem. None of the suspects were charged with any crime.

The Israeli police said on November 18 that suspects were arrested for "suspicion of fraudulent crimes in the area of cryptocurrencies in the amount of hundreds of millions" or at least ten million US dollars.

The explanation did not state which companies relate to the allegations.

As one of the arrested people, only the owner of Beitar Jerusalem, Moshe Hogeg, was identified in press reporting. The identities of the other were the subject of a gag arrangement, which was lifted on Tuesday after a joint application by the Financial Times and Times of Israel. Before the court order was lifted, the arrest of Shalem was reported despite the decision of Coindesk.

The hearings for the lifting of the gag commands have been postponed several times because the lawyers were tested positively for the Coronavirus and the judges had difficulty finding time for the legal representation of all accused, while the Israeli dishes processed a deficit of cases due to the pandemic.

A high -ranking police officer dragged thousands of confidential documents back and forth to hearings that were regularly canceled or postponed.

HOGEG's lawyers were quoted with the words that he "vehemently denied the allegations raised against him and cooperated without restrictions with his investigators".

The lawyers of Shalem said that he had "acted in accordance with the law and decidedly rejected every attempt to connect it with an act of fraud."

You said that Shalem left Hogeg's risk capital company in early 2018 and the suspect companies were active, after not holding a position with the group and without being involved. Our client is certain that at the end of the investigation it is determined that he did not commit misconduct. "

Celsius has grown quickly since its introduction in 2017 by offering investors from up to 17 percent on cryptocurrencies that are transferred to its platform and awarded to individuals and institutions. The assets held by Celsius has dropped from USD 26 billion to $ 19 billion since November. During the same period, Bitcoin's price fell by a third.

The 400 million dollar investment investment in October was directed by the westcap of the former Chief Financial Officer of Airbnb and Blackstone, Laurence Tosi, and by Caisse de Dépôt et Placement du Québec (CDPQ), Canada's second-largest pension fund. At that time

tosi told the FT that he carefully checked Celsius before he decided to invest. "We have now spent almost nine months with Alex [Mashinsky] and his team, and it is quite cooperative. It is the work you would expect from us with external consultants, lawyers, etc.," he said.

Alexandre Synnett, Chief Technology Officer from CDPQ, said: "We are very careful.. Our DUE-diligence process is very serious."

The investment followed the hard time of the state US regulatory authorities against lenders for digital assets in September, which said that Celsius was involved in non-registered securities. Celsius denied the claims.

Last week Rod Bolger, the former CFO of Canadian Bank RBC, was appointed successor from Celsius to Shalem. Celsius said that it would "continue to act in the best interest of our community, our customers and our investors".