Alex Mashinsky, the founder and former CEO of cryptocurrency lender Celsius Network, has pleaded guilty to two counts of fraud in the United States. Mashinsky was charged with seven counts of fraud, conspiracy, and market manipulation for misleading customers to invest in Celsius and inflating the value of the company’s proprietary crypto token. During a court hearing, he admitted to deceiving customers and manipulating token prices. As part of his plea deal, Mashinsky agreed not to appeal any sentence of 30 years or less.
Mashinsky’s guilty plea comes after a slump in crypto prices in 2022, which led to the collapse of several firms, including the bankrupt exchange FTX. Celsius itself filed for Chapter 11 bankruptcy protection in July 2022 but has since reemerged and shifted to Bitcoin mining.
Crypto lenders like Celsius saw rapid growth during the COVID pandemic by offering high interest rates to depositors and lending out tokens for profit. Mashinsky, along with Celsius’s former chief revenue officer, was accused of market manipulation, with allegations that he personally profited from selling CEL tokens.
This case is part of a broader crackdown on fraud in the crypto industry, with other prominent figures like Sam Bankman-Fried of FTX also facing legal troubles. Mashinsky’s guilty plea and cooperation with prosecutors could have implications for other individuals involved in similar schemes. It serves as a cautionary tale for those involved in the crypto world, highlighting the legal risks and consequences of fraudulent activities.
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