Former Celsius Network CEO Alex Mashinsky Pleads Guilty to Fraud
Alex Mashinsky, the founder and former CEO of cryptocurrency lender Celsius Network, has pleaded guilty in the United States to two counts of fraud. Mashinsky was indicted on seven counts of fraud, conspiracy, and market manipulation charges in July 2023. He admitted to misleading Celsius customers to invest and inflating the value of the company’s crypto token. According to prosecutors, Mashinsky admitted to giving false information about Celsius’ regulatory approval for its Earn program and failing to disclose his sales of the company’s token.
As part of his plea deal, Mashinsky agreed not to appeal a sentence of 30 years or less. He was one of several crypto moguls charged with fraud following a crypto market collapse in 2022, which led to the bankruptcy of companies like FTX. Celsius Network filed for bankruptcy in July 2022 after customers rushed to withdraw deposits as crypto prices fell. The company emerged from bankruptcy in January 2023 and shifted its focus to Bitcoin mining.
Crypto lenders like Celsius saw rapid growth during the pandemic by offering high-interest rates and easy loan access to depositors. However, many faced financial challenges as token prices plummeted amid rising interest rates and inflation. Mashinsky’s former chief revenue officer, Roni Cohen-Pavon, also pleaded guilty to market manipulation charges. Prosecutors stated that Mashinsky personally profited around $42 million from selling his token holdings.
The case against Mashinsky and other crypto moguls highlights the challenges facing the cryptocurrency sector as regulatory scrutiny increases. Mashinsky’s guilty plea is part of a broader crackdown on fraudulent activities in the industry, with other high-profile figures like FTX founder Sam Bankman-Fried facing criminal charges and sentencing.
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