- Alex Mashinsky pleads guilty to fraud and agrees to return $48 million in proceeds.
- Celsius filed for bankruptcy in 2022 and shifted to Bitcoin mining after emerging in 2023.
As an analyst with over two decades of experience in the financial industry, I must say that this development is far from surprising, given the tumultuous history of cryptocurrency and its frequent association with fraudulent activities. The guilty plea by Alex Mashinsky, founder of Celsius Network, is a stark reminder of the risks associated with unregulated markets and the urgent need for stricter oversight.
In an unexpected turn of events, Alex Mashinsky, the creator of the collapsed cryptocurrency lending platform Celsius Network, admitted guilt to two charges of fraud in the United States.
Originally, Mashinsky faced accusations involving seven offenses, such as fraud, deceptive practices, and price manipulation of cryptocurrency tokens. The allegations claim he duped Celsius users by providing false information and artificially boosting the value of his company’s digital coins.
Indeed, as anticipated, his admission of guilt signifies a pivotal moment in the prolonged legal tussle concerning the demise of Celsius Network.
Celsius crypto founder pleads guilty
During the hour-long hearing at Manhattan federal court, Mashinsky pointed out the same matter to Judge John Koeltl.
“I know what I did was wrong and I want to do what I can to make it right.”
He added,
“I accept full responsibility for my actions.”
Alex Mashinsky to repay $48 million
In accordance with his deal with American prosecutors, Mashinsky has consented to repay a total of $48 million that was illegitimately obtained, as stated by the U.S. Attorney’s Office in the Southern District of New York.
Instead, Mashinsky agreed not to contest the sentence if it was 30 years or fewer, which is the maximum punishment for the two fraud charges against him.
In other words, Federal prosecutors disclosed that Mashinsky earned an extra $42 million by selling his Celsius company’s unique Cel tokens for personal gain.
Currently, Mashinsky’s sentencing is set for the 8th of April, 2025, in front of Judge Koeltl.
Offering additional details about the subject, Damian Williams, the U.S. Attorney for Manhattan, commented through a public statement, explaining…
Through selling his personal CEL for significantly higher-than-market rates, Mashinsky amassed a fortune worth tens of millions. Regrettably, when the company collapsed, it was the customers who were left in possession of an asset that ultimately proved to be worthless.
Established in the year 2017, Celsius experienced bankruptcy filing in July 2022 as a result of increased customer withdrawal requests triggered by declining cryptocurrency market values.
After the 2022 crypto market plunge, numerous companies, such as FTX, faced bankruptcy, while Mashinsky was indicted for alleged fraudulent activities.
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2024-12-05 15:35