Former Celsius CEO Alex Mashinsky pleads guilty, agrees to 30 years in prison

Alex Mashinsky, the former CEO of crypto lender Celsius, has pleaded guilty to two charges related to fraud and market manipulation, agreeing to a sentencing guideline of 30 years in prison.

Mashinsky was indicted in July 2023 on seven counts, including fraud, conspiracy, and manipulation of the market for Celsius’ token, CEL. Under the terms of the agreement, Mashinsky has waived his right to appeal any sentence below 360 months in prison.

During a Dec. 3 hearing before US District Judge John Koeltl in Manhattan, Mashinsky acknowledged his role in misleading Celsius customers to invest in the platform and artificially inflating the value of CEL to benefit personally and bolster the company’s financial standing.

Federal prosecutors accused Mashinsky of using deceptive tactics to lure investors to Celsius, promising high returns on deposits while secretly manipulating the value of its native token. Additionally, they estimate he profited $42 million from sales of his holdings in the asset.

Mashinsky’s guilty plea follows that of Roni Cohen-Pavon, Celsius’ former chief revenue officer, who pleaded guilty in September 2023 and agreed to cooperate with the ongoing investigation. Cohen-Pavon’s cooperation could provide further details about Celsius’s inner workings and leadership, potentially leading to more charges.

The collapse

Mashinsky’s case is part of a broader wave of regulatory and legal action in the wake of the 2022 collapse of several major crypto firms, most notably the implosion of the FTX exchange.

Celsius, once one of the leading crypto lenders, filed for Chapter 11 bankruptcy protection in July 2022 after a sharp decline in crypto asset prices prompted a rush of customer withdrawal requests.

The company struggled to meet its obligations, and many clients found themselves locked out of their funds for months as the firm sought to restructure. Celsius officially exited bankruptcy in January 2023 and shifted its business focus toward Bitcoin mining.

Mashinsky’s legal troubles follow several other high-profile figures accused of criminal wrongdoing. In November 2023, Sam Bankman-Fried, the founder of FTX, was convicted of stealing roughly $8 billion from the exchange’s customers and sentenced to 25 years in prison in March 2024.

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Posted In: Bitcoin, US, Crypto, Featured, Legal

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Gino Matos

Reporter at CryptoSlate

Gino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).

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Assad Jafri

Editor & Reporter at CryptoSlate

AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

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