Former Celsius Network LLC CEO Alexander Mashinsky has pleaded guilty to one count of commodities fraud and one count of securities fraud. He faces up to 30 years in prison for orchestrating a massive $600 million investment scam targeting retail cryptocurrency investors.
Mashinsky, 58, led Celsius to become one of the largest crypto platforms in the world, claiming it was a “safe place” for investors’ assets. However, he misled customers about the company’s profitability and investment returns, using false promises to lure in billions of dollars from unsuspecting investors.
To further the scheme, Mashinsky artificially manipulated the price of Celsius’s proprietary token CEL by spending hundreds of millions of dollars purchasing it on the open market. This allowed him to sell his own CEL holdings for a substantial profit, reaping approximately $48 million in proceeds.
The scam collapsed when Celsius halted customer withdrawals in June 2022, leaving hundreds of thousands of investors with nearly $4.7 billion worth of assets stuck on the platform. The company eventually filed for Chapter 11 bankruptcy in July 2022.
Mashinsky is scheduled to be sentenced on April 8, 2024, by Judge Koeltl. The case is being overseen by the Office’s Securities and Commodities Fraud Task Force.
Source: https://www.justice.gov/usao-sdny/pr/celsius-founder-and-former-ceo-alexander-mashinsky-pleads-guilty-multi-billion-dollar