Former Celsius CEO Alex Mashinsky to Plead Guilty in Fraud Case

by

As a seasoned crypto investor with a keen eye for spotting red flags, I can’t help but feel a sense of vindication seeing Alex Mashinsky, the ex-CEO of Celsius Network, plead guilty to fraud charges. I’ve been warning my fellow investors about him for years, and it seems like he finally ran out of roadblocks to silence me.

Alex Mashinsky, one of the founders of Celsius Network, has admitted to charges related to fraud, following his role in the company’s bankruptcy within the wider repercussions of the 2022 cryptocurrency market crash. This confession represents a substantial step forward in the ongoing legal battles stemming from the aftermath of the crypto winter.

Celsius CEO Pleads Guilty to Manipulating CEL’s Market Value 

Previously, the head of Celsius is allegedly under investigation for artificially inflating the value of their company’s CEL token to entice investors, ultimately pocketing approximately $42 million in personal gains.

At a Manhattan court hearing on Tuesday, Mashinsky admitted his intention to plead guilty to two charges: commodities fraud and an attempt to inflate the worth of CEL. If found guilty, the most serious offense carries a potential sentence of up to 20 years in prison.

The bankruptcy of Celsius was one of the early indicators of the “crypto winter,” a period of decline that wiped out billions in market value. Afterwards, Celsius’s failure occurred along with several other notable downfalls, such as the collapse of FTX led by Sam Bankman-Fried.

As a researcher, I’ve long voiced my concerns about Alex Mashinsky, the former CEO of Celsius, accusing him of fraudulent activities. He even took steps to silence me by blocking me and attempting to sue me on two occasions. In my recent post on X (formerly Twitter), I asserted that Celsius was undeniably a Ponzi scheme, and now, he has been sentenced to 30 years in prison for his actions.

Simultaneously, Roni Cohen-Pavon, who previously represented Mashinsky legally, had confessed and decided to assist the authorities. Changing his plea spares Mashinsky from an upcoming trial slated for January. This choice might lead to a more lenient sentence than what could be imposed by a jury verdict.

In November, a federal judge refused to throw out fraud allegations against the CEO of Celsius, regarding the alleged manipulation of the CEL token market. The court determined that charges based on the Commodity Exchange Act and Securities Exchange Act could be pursued separately, strengthening the case against him.

Authorities accuse Mashinsky of deceiving Celsius clients for numerous years and organizing deceptive transactions to artificially boost the price of CEL. Inspectors assert that the firm invested hundreds of millions in purchasing CEL, frequently utilizing client funds without proper notification.

Cohen-Pavon reportedly managed these transactions under Mashinsky’s direction.

According to prosecutors, Mashinsky deceived customers while Celsius was in crisis, artificially inflated the value of the CEL token, and made off with approximately $42 million before its demise. By July 2022, Celsius had gone bankrupt and froze around $4.7 billion worth of customers’ assets, as reported by Mario Nawfal on X.

Ongoing Efforts to Reimburse Creditors

Just last week, it was disclosed that Celsius creditors are expected to receive approximately $127 million in either Bitcoin or U.S. dollars as payouts. Furthermore, Celsius has taken legal action against Tether, aiming to recover over $2 billion worth of Bitcoin pledge, accusing them of mismanaging the funds.

Previously this year, Celsius settled a dispute with the CEO of KeyFi, Jason Stone, who claimed that the company was running an investment scheme similar to Ponzi and had misrepresented its risk management strategies. The case hinged on KeyFi’s responsibility for overseeing Celsius investments from 2020 to 2021 under an agreement outlined in a memorandum of understanding.

Essentially, Alex Mashinsky’s admission of guilt signifies a crucial turning point in the ongoing attempts to make high-ranking figures answer for the mishaps that caused turbulence within the cryptocurrency market.

Read More

2024-12-04 00:47