Alex Mashinsky, former CEO of bankrupt crypto lender Celsius is pleaded guilty The two counts of fraud carry a maximum sentence of 30 years in prison.
In the wake of the company's collapse, the US Justice Department Mashinsky accused With seven counts of fraud, conspiracy and market manipulation. After originally pleading not guilty, he faced a criminal trial in the Southern District of New York in January.
However, at a court hearing on Tuesday, Mashinsky pleaded guilty to one count of commodities fraud and one count of securities fraud. The DOJ says Mashinsky admitted to lying to Celsius customers about fundamental aspects of the business, including how their funds would be used, as well as manipulating the price of a proprietary crypto token for his personal financial gain. Is.
As part of the plea deal, Mashinsky has agreed to forfeit $48 million of ill-gotten gains. He will be sentenced on April 8, 2025.
“Alexander Mashinsky perpetrated one of the largest frauds in the crypto industry,” U.S. Attorney Damian Williams said in a statement. “Today's sentence reflects this office's commitment to holding fraudsters like Mashinsky accountable for their crimes.”
Founded by Mashinsky in 2017, Celsius marketed itself as a new-age alternative to traditional banks — as “the safest place for your crypto,” the DOJ says.
The company took crypto deposits, which it either invested or lent to customers for interest payments. People were attracted by the promise of up to 17 percent interest on deposits – ten times higher than the rate offered by banks at the time. The DOJ claims that at its peak, Celsius held more than $25 billion in client assets.
However, things turned sour in May 2022. Collapse of Terra Luna stablecoin blew together billion dollar hole Celsius balance sheet and, as crypto prices plunged, panicked customers rushed to withdraw billions of dollars worth of crypto from their Celsius accounts. Following its investment in Terra Luna and other assets turned sourThe company no longer had the funds to make the payments and was eventually forced to suspend withdrawals. In July that year, Celsius filed for bankruptcyTrapped $4.7 billion of its clients' funds.