What Happened in Crypto Legal News this Week

Alex Mashinsky will be representing himself as Celsius executive prepares for sentencing

On Wednesday, lawyers representing Alex Mashinsky moved to withdraw as attorneys in the case, saying that the former Celsius CEO would be “proceeding pro se” — representing himself in court. Mashinsky was sentenced to 12 years in prison for his role in fraud and price manipulation at the crypto lending platform.

Source: PACER

Roni Cohen-Pavon, Celsius’ former chief revenue officer, is scheduled to be sentenced on May 13 after pleading guilty in September 2023. On May 4, US prosecutors recommended that the judge consider Cohen-Pavon’s “substantial assistance” to the government at sentencing, signaling leniency.

Celsius, along with cryptocurrency exchange FTX, filed for bankruptcy in 2022 amid a crypto market downturn that saw the collapse of many companies.

Washington city passes ban on crypto kiosks, Iowa restricts activities

On Tuesday, the city council of Spokane Valley in Washington voted unanimously to approve an ordinance prohibiting virtual currency kiosks and ATMs. The ban, proposed in response to many residents being the victims of crypto-related scams, followed many other jurisdictions passing similar measures.

The ordinance imposes a $250 civil penalty for anyone in noncompliance, and gives officials the authority to revoke the business license of any operator found to be in violation. Entities hosting the kiosks and ATMs have 30 days to be in compliance.

Spokane Valley’s actions preceded Iowa Attorney General Brenna Bird announcing on Wednesday that the state would “establish rigorous oversight for crypto ATMs” in an effort to protect residents from scammers. The law, SF2296, adds crypto kiosks to Iowa’s financial regulatory framework, giving state authorities the ability to impose civil penalties and injunctions on operators.

US authorities request forfeiture of $10 million connected to former FTX CEO

In a Thursday filing in the US District Court for the Southern District of New York, prosecutors overseeing the criminal case against Sam “SBF” Bankman-Fried requested that $10 million in assets recently located be used toward the former FTX CEO‘s forfeiture.

SDNY US Attorney Jay Clayton filed a motion of forfeiture after authorities located $10 million in cash tied to SBF held in an account at Fiduciary Trust Company. According to Clayton, the funds represented “the return of the investment made by [Bankman-Fried] in Semafor.”

Following his conviction and sentence to 25 years in prison, Bankman-Fried was ordered to pay more than $11 billion in forfeiture as part of his role in defrauding FTX users and investors. Clayton said that the judgment “remains unpaid” amid SBF awaiting the result of an appeal.