Michaela
Alex Mashinsky, the founder and former CEO of the now-bankrupt crypto lending platform Celsius Network, has pleaded guilty to two counts of fraud in connection with the company’s collapse.
The U.S. Department of Justice (DOJ) accused Mashinsky of committing securities fraud in two distinct ways. First, he allegedly misled Celsius customers regarding the company’s financial health and how it handled their funds. Second, Mashinsky reportedly secretly manipulated the market for Celsius’ token (CEL), profiting by selling his holdings at inflated prices.
In July 2023, Alex Mashinsky was indicted on seven charges, including fraud, conspiracy, and market manipulation. Initially, Mashinsky pleaded not guilty to the charges against him and sought to have two of the charges dismissed.
However, U.S. District Court Judge John G. Koeltl of the Southern District of New York ruled that Manshinky’s arguments against the charges were “without merit.” As a result, Mashinsky would be required to face the full seven-count indictment if the case goes to trial.
Mashinsky’s plea deal indicated that he agreed to forfeit over $48 million in profits obtained from these illegal activities to the DOJ.
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In court, Mashinsky admitted to misleading Celsius customers by giving them “false comfort”. “I said that Celsius had approval from regulators. It was false. I falsely said I was not selling my CEL tokens, I accept full responsibility for my actions,” Mashinsky was quoted stating.
Additionally, Alex Mashinsky further admitted to making misleading claims during a 2021 interview, where he stated that Celsius had secured regulatory approval for its Earn program, which allowed the platform to use customer crypto assets to generate returns.
Mashinsky has reached an agreement with prosecutors, pledging not to appeal any sentence of 30 years or less — the maximum penalty for the two fraud charges he has admitted to. His sentencing is scheduled for April 8, 2025.
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Peter Schiff, a prominent critic of Bitcoin, commented on Mashinsky’s guilty plea via a post on X. “It was obvious to me that he was a fraudster based on a single conversation,” Schiff wrote, sharing a video of himself debating with Machinsky about Bitcoin.
Celsius halted customer withdrawals and filed for Chapter 11 bankruptcy in 2022, marking one of the most significant collapses in the crypto industry. The company faced a massive $1.2 billion hole in its balance sheet.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
