Up to 30 years in prison! Celsius founder ALEX Mashinsky pleaded guilty to fraud, to be sentenced in April next year

Former Celsius founder and CEO Alex Mashinsky, who once shouted in the crypto world, now stands in court and pleads guilty, admitting to two major fraud charges and agreeing to return $48 million in criminal proceeds. He has reached a protocol with the prosecutor and may face up to 30 years in prison.

From striving for innocence to confessing guilt with one's own mouth

After being arrested in New York in July last year, Alex Mashinsky faced seven serious criminal charges, including securities fraud, commodity fraud, telecommunications fraud, and conspiracy to manipulate the price of Celsius' native coin CEL.

According to reports from Reuters and Inner City Press, Alex Mashinsky publicly admitted in court on Tuesday:

I once said that Celsius had obtained regulatory approval, which was false; I also claimed that I did not sell CEL Token, which was also a lie. I will take full responsibility for my actions.

He further admitted, "I don't know which specific law I violated, but I know that what I did was wrong and illegal."

Initially, Alex Mashinsky pleaded not guilty to all charges and even attempted to have two of the charges dismissed on the grounds of 'lack of legal basis'. However, Judge John G. Koeltl of the Southern District of New York, who is responsible for handling this case, found the defense's arguments 'baseless', and if the case goes to trial, Alex Mashinsky will have to face all 7 charges.

Under legal pressure, Alex Mashinsky chose to plead guilty, admitting to two charges of securities fraud and commodities fraud.

Celsius bankruptcy triggers chain reaction, exposing financial black hole

Celsius announced the suspension of user withdrawals in June 2022 citing 'extreme market conditions'. Just one month later, the company officially filed for bankruptcy protection, marking the beginning of a series of collapses among cryptocurrency operators. Subsequently, companies such as Voyager, BlockFi, Genesis, and FTX have all fallen into bankruptcy crises.

Although the closures of Terra and Three Arrows Capital in the second half of 2022 have impacted many cryptocurrency companies, it's more accurate to say that it's the insufficient internal Risk Management of Celsius, rather than market pressure, that caused the collapse.

In the past, Alex Mashinsky has repeatedly publicly assured users during live broadcasts that 'Celsius will never carry out unsecured loans because we will not let users bear unnecessary risks.'

However, Celsius's bankruptcy documents revealed that the company had already issued a large number of unsecured loans, and the balance sheet showed a staggering $1.2 billion gap. This is not only a business failure, but also a complete collapse of trust.

The sentence will be announced in April next year.

US Attorney for the Southern District of New York, Damian Williams, said, 'Alex Mashinsky has shaped Celsius into a crypto world bank, but in reality, he betrayed the trust of his clients while deceiving investors and manipulating the market for personal gain. Today's plea is a judgment on his illegal activities and a warning to anyone attempting to manipulate the financial markets.'

Alex Mashinsky's sentence will be pronounced on April 8, 2025, at the Manhattan Federal Court. This case not only marks the end of Alex Mashinsky's cryptocurrency career but also sounds the alarm for the entire industry. In this rapidly changing market, trust and integrity are more precious and fragile than any token.

From peak to abyss, Alex Mashinsky's story reminds us that integrity is still the only unchanging bottom line behind the frenzy and bubble of the cryptocurrency world.

The article " was first published in Blockchained".