Alex Mashinsky, the disgraced founder and ex-CEO of cryptocurrency lender Celsius Network, admitted guilt to two counts of fraud on Tuesday.
What Happened: Despite his initial plea of not guilty, Mashinsky confessed to two of the seven charges during a hearing before a U.S. District Judge, according to a Reuters report.
The charges included commodities fraud and a scheme to manipulate the price of Celsius (CRYPTO: CEL), Celsius' in-house token.
Mashinsky admitted to providing Celsius customers with “false comfort” by falsely claiming in a 2021 interview that Celsius had received regulatory approval for its “Earn” program. He also confessed to not disclosing that he had been selling his CEL holdings, the platform’s in-house token.
“I know what I did was wrong, and I want to try to do whatever I can to make it right,” Mashinsky stated. He agreed not to appeal any sentence of 30 years or less, the maximum sentence for the two counts. His sentencing is scheduled for Apr. 8, 2025.
See Also: MatterFi Introduces Infrastructure To Address Phishing, Cybersecurity Risks In Digital Finance
Influential financial market commentator Peter Schiff said it was “obvious” that Mashinsky was a fraudster. He posted an old clip of his argument with Mashinsky over Bitcoin’s (CRYPTO: BTC) yield-generating potential.
Why It Matters: Mashinsky was charged with seven counts of fraud, conspiracy, and market manipulation in 2023 and subsequently taken into custody.
His arrest followed the collapse of Celsius Network and a Department of Justice inquiry into the company’s downfall. The Securities and Exchange Commission also filed a lawsuit against Mashinsky and Celsius, alleging securities fraud.
Celsius was among several prominent cryptocurrency companies that imploded in 2022. The collapse of Terra (CRYPTO: LUNA) and a downturn in the digital-asset markets left Celsius with a significant deficit in its balance sheet, rendering it unable to handle a surge in customer withdrawal requests. The company applied for bankruptcy protection in 2022.
However, Celsius managed to officially exit bankruptcy in early 2024, beginning a $3 billion repayment to its creditors. This marked the end of an 18-month restructuring process following the approval of the company’s reorganization plan by the Bankruptcy Court for the Southern District of New York.
Photo Courtesy: Web Summit on Flickr
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
