Celsius

Ponzi

April

Alex Mashinsky, the former CEO and founder of Celsius, is confronting a potential 30-year prison sentence after admitting guilt to charges related to the downfall of the bankrupt cryptocurrency lender. In a significant development, the U.S. Attorney's Office for the Southern District of New York reported that Mashinsky confessed to one count of commodities fraud for deceiving customers regarding Celsius's profitability and the investment strategies of the company. 
Mashinsky further acknowledged guilt for one count of securities fraud, which involved illicitly manipulating and inflating the value of the company's CEL token. 
This scheme allowed Mashinsky to sell his personal holdings for millions in profit. Damian Williams, U.S. Attorney for the Southern District of New York, described Mashinsky’s actions as orchestrating one of the largest frauds within the cryptocurrency sector. 
In July 2022, Celsius Network, one of the largest crypto lending platforms, halted all withdrawals before filing for Chapter 11 bankruptcy protection, leaving customers unable to access billions in deposited assets. The platform, which had promised high yields for crypto deposits, was found to have been operating like a Ponzi scheme according to federal prosecutors, using new customer deposits to pay yields to existing customers while engaging in risky trading strategies. 
Founder and former CEO Alex Mashinsky was arrested in July 2023 and charged with multiple counts of fraud, accused of manipulating the price of the platform's CEL token and misleading investors about the company's business model and financial health. In December 2023, Mashinsky was found guilty on all seven criminal counts including securities fraud, market manipulation, and wire fraud, with prosecutors revealing he had personally withdrawn $68 million from Celsius while publicly claiming the platform was safe and stable. 
The collapse of Celsius, which held about $12 billion in customer assets at its peak, marked one of the first major failures in the crypto industry that would later cascade into broader market instability throughout 2022. 
“He enticed everyday crypto investors with misleading assurances of low-risk investments. Promises of safety akin to a bank bolstered by slogans like ‘Unbank Yourself’ convinced investors, yet Celsius never achieved profitability in truth,” Williams stated. 
As a component of the plea agreement, Mashinsky is set to forfeit over $48 million from his fraudulent endeavors. According to Reuters, he consented not to contest any sentence of up to 30 years. The sentencing hearing is scheduled for April 8th.

Celsius Founder Mashinsky Could Face 30-Year Prison Term

Yellow News

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