Once a prominent figure in the crypto world, Celsius founder and former CEO Alex Mashinsky now stands in court, bowing his head in guilty plea, admitting to two major fraud charges, and agreeing to repay $48 million in criminal proceeds. He has reached an agreement with the prosecution and may face up to 30 years in prison.
From fighting for innocence to pleading guilty
After Alex Mashinsky was arrested in New York last July, he faced seven serious criminal charges, including securities fraud, commodities fraud, telecommunications fraud, and conspiracy to manipulate the price of the Celsius native token CEL.
According to reports from (Reuters) and (Inner City Press), Alex Mashinsky publicly admitted in court on Tuesday:
I once said that Celsius had obtained approval from regulatory authorities, which was false; I also claimed that I did not sell CEL tokens, which was also a lie. I will take full responsibility for my actions.
He further admitted: 'I do not know exactly which laws I violated, but I am clear that what I did was wrong and illegal.'
Initially, Alex Mashinsky pleaded not guilty to all charges, even attempting to have two of the charges dismissed on the grounds of 'lack of legal basis.' However, Judge John G. Koeltl of the U.S. District Court for the Southern District of New York deemed the defense's claims 'baseless,' and if the case went to trial, Alex Mashinsky would have to face all seven charges.
Under legal pressure, Alex Mashinsky chose to plead guilty, admitting to the charges of securities fraud and commodities fraud.
The collapse of Celsius triggered a chain reaction, exposing a financial black hole.
Celsius announced the suspension of user withdrawals in June 2022 citing 'extreme market conditions.' Just a month later, the company officially filed for bankruptcy protection, marking the beginning of a series of collapses within the cryptocurrency industry, with companies like Voyager, BlockFi, Genesis, and FTX soon following into bankruptcy crises.
Although the collapses of Terra and Three Arrows Capital impacted many cryptocurrency companies in the second half of 2022, it is more accurate to say that it was the company's internal risk management failures that led to the downfall of Celsius rather than market pressures.
In the past, Alex Mashinsky had repeatedly assured users during live broadcasts, 'Celsius will never engage in unsecured loans, as we will not let users bear unnecessary risks.'
However, Celsius’s bankruptcy filings revealed that the company had long issued a large number of unsecured loans, with a staggering $1.2 billion hole in its balance sheet. This was not just a failure in operations but a complete collapse of trust.
Sentencing will be announced in April next year.
Damian Williams, U.S. Attorney for the Southern District of New York, stated: 'Alex Mashinsky shaped Celsius into a bank for the crypto world, but in reality, he betrayed the trust of his clients while deceiving investors and manipulating the market for personal gain. Today's guilty plea is a judgment against his illegal actions and a warning to all who attempt to manipulate financial markets.'
Alex Mashinsky's sentencing will be announced on April 8, 2025, at the Manhattan federal court. This case not only marks the end of Alex Mashinsky's cryptocurrency career but also serves as a wake-up call for the entire industry. In this rapidly changing market, trust and integrity are more precious and more fragile than any token.
From peak to abyss, Alex Mashinsky's story reminds us that behind the frenzy and bubble of the cryptocurrency world, integrity remains the only unchanging bottom line.
"Maximum sentence of 30 years! Celsius founder Alex Mashinsky pleads guilty to fraud, sentencing in April next year," this article was first published on (BlockTempo).