The founder and former CEO of Celsius Network, a cryptocurrency lending platform, has pleaded guilty to federal fraud charges in New York federal court. Alexander Mashinsky, 58, admitted to commodities and securities fraud, acknowledging that he misled customers about the business operations.
Mashinsky confessed to illegally manipulating the price of Celsius’s proprietary crypto token and selling his own tokens at inflated prices, pocketing approximately $48 million before Celsius Network collapsed into bankruptcy in 2022. He admitted to deceiving customers by suggesting regulatory consent for the company's actions in 2021 and falsely claiming not to sell crypto tokens in 2019.
During his court appearance, Mashinsky took full responsibility for his actions, which spanned from 2018 to 2022. Celsius Network marketed itself as a secure platform for customers to deposit crypto assets and earn interest, with assets purportedly reaching $25 billion at its peak.
U.S. Attorney Damian Williams described Mashinsky's actions as orchestrating one of the largest frauds in the crypto industry. Mashinsky used enticing slogans like “Unbank Yourself” to attract customers, promising the safety of their funds similar to traditional banks while using customer deposits to inflate the Celsius token's value.
Prosecutors revealed that Mashinsky made millions by selling his own CEL tokens at artificially high prices, leaving customers at a loss when the company went bankrupt. Mashinsky promoted Celsius through various media channels and ignored warnings from employees who noticed false and misleading statements.
As part of a plea agreement, Mashinsky faces a potential sentence of up to 30 years in prison and must forfeit over $48 million. Sentencing is scheduled for April 8.
