Alex Mashinsky, the former CEO of Celsius Network, pleaded guilty to fraud and market manipulation. In a court hearing on December 3, Mashinsky admitted to tricking clients and artificially inflating the value of Celsius’ native cryptocurrency, CEL. This ruling follows his defense team’s unsuccessful attempt to have the charges dismissed earlier this year.
Mashinsky, who ran Celsius until his retirement in 2022, admitted to making misleading comments about regulatory permission for Celsius’ “Earn” program, which urged users to deposit crypto assets with promises of rewards. He also admitted to selling his own CEL tokens at inflated rates, making almost $42 million before the company declared bankruptcy in July 2022.
In court, Mashinsky accepted full responsibility for his actions, admitting that his deceptive statements about Celsius’s safety and regulatory compliance misled numerous investors. The fraudulent actions lasted several years and culminated in the company’s insolvency when cryptocurrency values fell.
As part of his plea deal, Mashinsky faces up to 30 years in jail. The court will sentence him in April 2025. His lawsuit follows a series of court cases involving prominent figures in the cryptocurrency industry, such as FTX creator Sam Bankman-Fried, who faced a fraud conviction in 2023.
The fall of Celsius has had a long-term impact on the cryptocurrency sector, underlining the risks of unregulated platforms that promised large returns to investors. The current legal proceedings charge former Celsius employees, particularly Roni Cohen-Pavon, with contributing to the platform’s demise.
