Former Celsius CEO arrested, company agrees to pay $4.7 billion settlement

Former Celsius CEO Alex Mashinsky was arrested by federal law enforcement Thursday, a source familiar with the matter told CNBC, as federal regulators announced his bankrupt crypto exchange Celsius would pay a $4.7 billion fine.

Federal prosecutors charged Mashinsky with securities, commodities, and wire fraud, as well as various securities manipulation and fraud charges. If convicted, Mashinsky and a co-defendant, Roni Cohen-Pavon, face decades in prison.

The settlement, announced by the FTC, will not be paid until the company is able to return what remains of customer assets in bankruptcy proceedings.

The concurrent SEC proceedings are against Mashinsky and Celsius, and allege that Mashinsky misled investors and fraudulently manipulated the price of Celsius' exchange token, CEL.

The SEC has alleged that Mashinsky and his company "misrepresented" the company's "central business model and the risks to investors" by allegedly claiming Celsius did not engage in risky trading and paid most, but not all, of the company's revenue over to investors.

"None of these claims," the SEC alleged, were true.

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