Alex Mashinsky, the founder of the ill-fated crypto lending platform #celsiu , has pleaded guilty to two counts of fraud, admitting his role in misleading investors.
Notably, Mashinsky was charged with artificially inflating the price of the CEL token, a scheme that allegedly helped him secure $42 million in personal gains. He admitted to misleading customers, particularly in December 2021, when he made false claims about the platform’s financial status.
Mashinsky falsely suggested that Celsius had approval from regulators, a statement he later acknowledged was not true. This misrepresentation was tied to Celsius’ earn program, where customers exchanged Bitcoin for CEL tokens under the false belief that the platform was financially sound.
Furthermore, Mashinsky manipulated the CEL token’s price, which involved direct market intervention. Prosecutors argue that Celsius spent hundreds of millions of dollars purchasing its token to prop up its value, using funds from customer deposits without proper disclosure.
This strategy created a false sense of security for investors unaware of the company’s financial instability. Mashinsky’s actions contributed to the firm’s eventual collapse, which left Celsius with over $1 billion in debt.