Celsius

Major

Glimpse

April

<p>Alex Mashinsky, the founder and former CEO of Celsius Network, <a href="https://www.justice.gov/usao-sdny/pr/celsius-founder-and-former-ceo-alexander-mashinsky-pleads-guilty-multi-billion-dollar">pleaded guilty</a> to fraud charges related to his role in the company’s downfall. The charges stem from a multi-year scheme that led to the bankruptcy of Celsius in 2022, marking one of the largest scandals in the cryptocurrency sector.</p>
<p>Mashinsky admitted to two serious charges: commodities fraud and market manipulation of the Celsius token, CEL. These crimes contributed to the collapse of the once-promising crypto lending platform, which claimed to be a safe alternative to traditional banking. The charges could result in a prison sentence of up to 20 years.</p>
<h2 id="strong-the-scheme-behind-celsius-collapse-strong"><strong>The Scheme Behind Celsius' Collapse</strong></h2>
<p>Celsius, founded in 2017, initially attracted millions of customers with its high-interest crypto deposit programs. However, the company’s rapid growth was built on shaky ground. Prosecutors allege that Mashinsky manipulated the price of the Celsius token to artificially inflate its value while secretly selling off his holdings at inflated prices.</p>
<p>Mashinsky’s actions are said to have netted him around $48 million before the company collapsed. This came to light after the crypto market’s downturn in 2022, when customers rushed to withdraw their funds, and Celsius filed for bankruptcy shortly afterward. The collapse followed a series of events, including the fall of other crypto giants like FTX and Three Arrows Capital, in what became a turbulent year for the industry.</p>
<h2 id="strong-details-of-the-fraudulent-activities-strong"><strong>Details of the Fraudulent Activities</strong></h2>
<p>Mashinsky’s fraudulent activities were not limited to the manipulation of the CEL token. He reportedly made <a href="https://www.justice.gov/usao-sdny/pr/celsius-founder-and-former-chief-revenue-officer-charged-connection-multibillion">misleading statements</a> to investors about the financial health of Celsius. Despite knowing the company was in trouble, Mashinsky publicly claimed that Celsius was financially sound, offering false comfort to customers.</p>
<p>Per reports, he gave interviews where he falsely suggested that Celsius had received regulatory approval when it had not. These statements were allegedly intended to keep the platform’s image intact while it was secretly struggling to meet customer withdrawals.</p>
<h2 id="strong-the-legal-aftermath-strong"><strong>The Legal Aftermath</strong></h2>
<p>Mashinsky’s guilty plea represents a significant milestone in the ongoing legal proceedings. During his court appearance, he expressed regret for his actions, acknowledging the harm caused to both investors and customers. “I accept full responsibility for my actions,” Mashinsky told the court, admitting that he deceived consumers with false assurances about the safety of their deposits.</p>
<p>The case against him is part of a broader crackdown on fraud in the cryptocurrency industry, with several prominent figures facing legal action. In September 2023, Celsius's former Chief Revenue Officer, Roni Cohen-Pavon, also <a href="https://www.theguardian.com/technology/2024/dec/03/alex-mashinsky-crypto-fraud-celsius">pleaded guilty</a> to similar charges and agreed to cooperate with investigators.</p>
<h2 id="strong-a-glimpse-into-the-future-strong"><strong>A Glimpse into the Future</strong></h2>
<p>As part of his plea agreement, Mashinsky faces a potential sentence of up to 30 years in prison, though he could receive a reduced sentence if he cooperates fully with authorities. In addition to his criminal charges, he faces civil lawsuits from the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). These agencies claim that Celsius, under Mashinsky's leadership, engaged in unregistered securities offerings and made numerous false statements about its operations.</p>
<p>Mashinsky’s sentencing is scheduled for April 2025, but his legal battles are far from over. If convicted, he will be required to forfeit the $48 million he made through the illegal sale of CEL tokens.</p>

Ex-Celsius CEO Alex Mashinsky Pleads Guilty in Major Crypto Fraud Case

Table of Contents

BSCN

Other articles published on Dec 10, 2024

1xBit Launches Spectacular Santa’s List Campaign for All Active Players

Galxe unveils Gravity EVM upgrade and $50M ecosystem fund

Crypto ‘buy the dip’ moments to last longer this cycle: Hedge fund founder

HECO Network to Cease Operations a Year After $87M Hack

🎉 600K Downloads & Counting: XENEA Wallet Hits a Milestone! 🚀 Win 1,000,000 Gems!

Why Is Crypto Market Down Today? Bitcoin Dips 6%, Altcoins Wipe Out $258Bn

Join our free newsletter for daily crypto updates!