Cryptocurrency Lender Celsius Founder Alex Mashinsky Pleads Guilty to Fraud Charges
Alex Mashinsky, the founder and former CEO of the bankrupt cryptocurrency lender Celsius Network, pleaded guilty on Tuesday to two counts of fraud, bringing an end to a high-profile case that shook the crypto industry, Al Jazeera reports.
Mashinsky, 59, had initially pleaded not guilty to seven counts of fraud, conspiracy, and market manipulation in July 2023, but changed his plea during a hearing before US District Judge John Koeltl.
The guilty pleas relate to charges of commodities fraud and a fraudulent scheme to manipulate the price of CEL, Celsius’s proprietary cryptocurrency token. In court, Mashinsky admitted to misleading Celsius customers, specifically citing a 2021 interview where he falsely claimed that the company’s “Earn” program — which offered annual interest rates as high as 18% on deposited cryptocurrencies — had received regulatory approval. He also admitted to failing to disclose the sale of his personal CEL holdings.
As part of a plea agreement, Mashinsky will not appeal any sentence of 30 years or less – the maximum penalty he faces for the two counts. The agreement comes after federal prosecutors in Manhattan accused him and Celsius’s former chief revenue officer, Roni Cohen-Pavon (who pleaded guilty in September and agreed to cooperate), of manipulating the market for the CEL token. Prosecutors allege Mashinsky personally profited approximately $42 million from selling his CEL holdings.
Mashinsky’s guilty plea is the latest in a series of high-profile indictments and convictions within the cryptocurrency sector following the 2022 crypto market crash. The collapse of Celsius, which filed for Chapter 11 bankruptcy protection in July 2022, left numerous customers unable to access their funds. The company, founded in 2017, has since exited bankruptcy and shifted its focus to Bitcoin mining.
The case against Mashinsky mirrors the downfall of other prominent crypto figures, notably Sam Bankman-Fried, the founder of FTX, who was convicted of stealing billions from customers and sentenced to 25 years in prison.
