Jacquelyn Melinek

<div id="highlights-block_61a4ed328fd4c" class="highlights">
 <ul>
 <li>Moshe Hogeg, an Israeli businessman, chairman of the Blockchain Research Institute at Tel Aviv University and owner of Beitar Jerusalem FC, was reportedly arrested for alleged fraud and assault charges, according to news reports last week</li>
 <li>Celsius CEO Alex Mashinsky said, “there was no reason for us to suspect any criminal or pending matters” at the time of Shalem&#8217;s employment</li>
 </ul>
 
</div>



Celsius Network has suspended its Chief Financial Officer Yaron Shalem due to external fraud and sexual assault allegations, according to a source close to the matter who shared an internal company letter with Blockworks.&nbsp;



Moshe Hogeg, an Israeli businessman, chairman of the Blockchain Research Institute at Tel Aviv University and owner of Beitar Jerusalem FC, was reportedly arrested for alleged fraud and assault charges, according to <a href="https://www.timesofisrael.com/alleged-dirty-dealings-and-sex-offenses-moshe-hogegs-long-history-of-deceit/" target="_blank" rel="noreferrer noopener">news reports</a>.&nbsp;



Hogeg was arrested alongside seven other individuals, who were unnamed at the time, but one of those individuals was Shalem, the source told Blockworks.



<blockquote class="wp-block-quote">“We were recently made aware of news regarding Yaron Shalem, an employee of the company and his involvement in an investigation taking place in Israel. While this is related to a matter that took place over four years ago and before he joined Celsius, we took the decision to suspend Yaron effective as of November 18, 2021,” the Celsius letter stated.&nbsp;</blockquote>



The company also <a href="https://twitter.com/CelsiusNetwork/status/1464293813707489288?s=20" target="_blank" rel="noreferrer noopener">tweeted</a> out on November 26 that the employee was immediately suspended and verified that no assets were misplaced or mishandled.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We were recently made aware of a police investigation in Israel involving an employee. While this is in no way related to the employee’s time or work at <a href="https://twitter.com/CelsiusNetwork?ref_src=twsrc%5Etfw">@CelsiusNetwork</a>, the employee was immediately suspended. We have also verified that no assets were misplaced or mishandled.&mdash; Celsius (@CelsiusNetwork) <a href="https://twitter.com/CelsiusNetwork/status/1464293813707489288?ref_src=twsrc%5Etfw">November 26, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Israeli newspaper <a href="https://www.haaretz.com/israel-news/.premium-israel-arrests-soccer-club-owner-suspected-of-sex-offenses-and-cryptocurrency-fraud-1.10396691">Haaretz reported</a> that police said the eight individuals were arrested on suspicion of cryptocurrency fraud “involving hundreds of millions of shekels,” in addition to sexual offenses. “Each (individual) is suspected of pocketing tens of millions of shekels and conspiring to mislead potential investors on a number of projects involving cryptocurrency,” Haaretz added. 



The source did not clarify which company he was with when the alleged crimes occurred, but according to <a href="https://www.linkedin.com/in/yaron-shalem-b072111/?originalSubdomain=il" target="_blank" rel="noreferrer noopener">Shalem’s LinkedIn page</a>, he was the CFO of Singulariteam VC, an Israeli-based venture capital firm, from January 2014 to March 2018. The conduct in question predates Shalem’s tenure at Celsius by about four years.



Hogeg&#8217;s lawyers said that he &#8220;vehemently denies the allegations against him and is cooperating fully with his investigators,” Haaretz reported. Shalem was not available for immediate comment requested by Blockworks at the time of publication.&nbsp;



“We worked with (Shalem) for eight months, but we are going to let the courts decide and dig into it,” Celsius CEO Alex Mashinsky commented to Blockworks.&nbsp;



“Celsius was not involved or part of it, and we conducted a background check and everything else, and it all came clean, so there was no reason for us to suspect any criminal or pending matters as of eight months ago,” Mashinsky said. “We conducted an internal audit review so nothing is missing and there’s nothing abnormal inside of Celsius, but he is suspended,” Mashinsky added.



Separately, Celsius increased its $400 million Series B round from October to $750 million after oversubscribing the raise, Mashinsky <a href="https://cms.blockworks.co/celsius-expands-its-series-b-from-400m-to-oversubscribed-750m/" target="_blank" rel="noreferrer noopener">told Blockworks</a> on Wednesday. The company’s new proceeds will go toward expanding its product offerings, growing into new markets and further bridging centralized finance and DeFi via its recently announced project CelsiusX, the company said in a statement.&nbsp;



Additionally, Celsius will use the funds to further improve the utility of its platform for its supportive community of users, and its commitment to sustainable Bitcoin mining, the company said.



This is a developing story that could change as more details become available. Please check back for updates.