Summary:
Alexander Mashinsky, founder of Celsius Network, pleads guilty to federal fraud charges.
Admitted to manipulating the price of Celsius's crypto token and pocketing $48 million.
Misled customers with false regulatory claims from 2018 to 2022.
Celsius Network collapsed in 2022, with assets peaking at $25 billion.
Mashinsky could face up to 30 years in prison and must forfeit over $48 million.
Celsius Network Founder Pleads Guilty
The founder and former CEO of Celsius Network, Alexander Mashinsky, has pleaded guilty to federal fraud charges in a New York court. He admitted to misleading customers about the business, which ultimately led to its collapse in 2022.
Fraudulent Activities Revealed
Mashinsky confessed to manipulating the price of Celsiusâs proprietary crypto token while secretly selling his own tokens at inflated prices, pocketing around $48 million. He acknowledged that he misled customers by suggesting there was regulatory consent for the companyâs operations, knowing they would feel âfalse comfortâ from his statements.
A Deceptive Scheme
From 2018 to 2022, Mashinsky marketed Celsius as a modern bank for crypto assets, promising safety and interest on deposits. However, he and his co-conspirators used customer deposits to artificially inflate the value of Celsiusâs token.
Consequences of His Actions
Mashinskyâs actions have been described by U.S. Attorney Damian Williams as âone of the biggest frauds in the crypto industry,â with Celsius at one point boasting assets of around $25 billion. His plea agreement could result in a 30-year prison sentence and forfeiture of over $48 million.
Next Steps
Sentencing is set for April 8. Mashinsky's case highlights the ongoing issues of trust and transparency in the cryptocurrency sector, raising questions about the future of similar platforms.
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