Former lending platform Celsius CEO Alex Mashinsky pleaded guilty to fraud in court on December 3, becoming a focal point in another high-profile case following the FTX collapse in 2022. Once regarded as a 'pioneer of crypto banking,' Mashinsky was prosecuted for allegedly defrauding users, manipulating CEL token prices, and false advertising, and was brought to justice in 2023, now changing his plea to guilty. If the sentence is less than 30 years, he cannot appeal the verdict.
Admitted to manipulating the price of the CEL token and making false statements.
Mashinsky admitted to two counts of fraud, including commodity fraud and manipulating token prices, in a federal court in New York on December 3. He stated, 'I know I did wrong and am willing to make full amends.' Mashinsky also confessed to the judge that in December 2021, he lured customers to exchange Bitcoin for the platform token CEL through Celsius's investment plan, suggesting to users that Celsius had received regulatory approval, thus deceiving users' trust.
The collapse of Celsius marks the beginning of the crypto winter.
Celsius filed for bankruptcy in 2022, owing over $1 billion in debt, marking the beginning of the market crash in 2022, followed by the collapse of stablecoin TerraUSD, FTX exchange, and others, triggering a wave of crypto winter. At that time, Celsius attracted users with high-interest returns, but as the market crashed and a large number of users withdrew funds, Celsius declared bankruptcy.
According to prosecutors, Mashinsky illegally profited $42 million by manipulating the price of the platform's token CEL. Celsius even misappropriated customer deposits to support the token buyback, despite the actual value being 'abysmal.'
Former executives cooperate to testify against Mashinsky, with a plea agreement capping the sentence at 30 years.
Former Celsius executive Roni Cohen-Pavon pleaded guilty last year and cooperated with prosecutors by providing key evidence. Prosecutors stated that Cohen-Pavon privately told Mashinsky, 'No one is buying CEL in the market, absolutely no one wants to buy, it's just us pretending,' and further said, 'This price is completely fake; we spend $8 million a week just to keep the price stable.'
Mashinsky's plea will avoid the scheduled trial in January next year, but he has also accepted the conditions of the plea agreement. If the sentence is less than 30 years, he cannot appeal the verdict, with the final outcome to be revealed on April 8 next year.
(Celsius founder Mashinsky faces a century-long sentence, seeking to overturn the conviction by blaming former employees.)
Celsius founder Mashinsky pleads guilty to a maximum 30-year sentence for spending $8 million a week to manipulate CEL, first reported by Chain News ABMedia.