Categories: MarketsMenafn

Former Celsius CEO Alex Mashinsky Faces 30 Years in Prison: Details

Alex Mashinsky, the former CEO of the disgraced crypto lender Celsius, has pleaded guilty to commodities and securities fraud, charges that could result in a maximum sentence of 30 years in prison. 

Related: Celsius Will Distribute $127M to Creditors

‘One of the Biggest Frauds in Crypto History’

During a court hearing, Mashinsky admitted to making false claims about the company’s “Earn” program, which misled investors into transferring Bitcoin to the platform —and also earned him him $48 million in profits. 

He acknowledged falsely stating that Celsius had regulatory approval and denying his sale of CEL tokens while secretly profiting from inflated prices.

U.S. Attorney Damian Williams described the case as “one of the biggest frauds in the crypto industry,” noting that Celsius —despite its promises of high returns and safety comparable to a bank— was never profitable.

“Using catchy slogans like ‘Unbank Yourself,’ Mashinsky promised that Celsius would keep customers’ crypto as safe as money in a bank, but unlike a bank, the crypto lender returned most of the profits from its business back to users.”

It is Over

Celsius was founded in 2017 by Mashinsky and his business partner, Daniel Leon. It didn’t take long for the company, which used the now ironic and morbid slogan “unbank yourself”, to experience explosive growth. Its business model and strategy were so attractive at the time —promising up to 20% yields— that it managed over $25B in 2021. Its native token, CEL, reached a market cap of over $3.2B in June of that year.

However, the 2022 collapse of the Terra blockchain and ensuing market turmoil led Celsius to halt withdrawals and eventually declare bankruptcy. Mashinsky was subsequently indicted in 2023 on seven charges, including fraud and market manipulation, with prosecutors alleging that he misled customers and inflated CEL’s price.

Related: Solana: Grayscale Will Convert its $120M SOL Trust Into ETF

Initially set for trial in January 2024, Mashinsky will now be sentenced in April and faces up to 30 years in prison. Former Celsius Chief Revenue Officer Roni Cohen-Pavon, who also pleaded guilty to similar charges, is scheduled for sentencing next week.

Jerry Rolon

After working for 7 years as a Internet Marketer, Jerry now aims to explore the journalistic side of Internet. With his impeccable knowledge in this domain, he churns out some of the best news articles from the internet niche. With respect to acedamics, Jerry earned a degree in business from California State University.

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