Alexander Mashinsky, the founder and former CEO of Celsius Network LLC, has pled guilty to charges of commodities fraud and securities fraud related to fraudulent activities at Celsius. This announcement was made by Damian Williams, the United States Attorney for the Southern District of New York. Mashinsky admitted to misleading customers about Celsius's financial health and manipulating the price of CEL, its proprietary crypto token, while profiting from these schemes.
"Mashinsky orchestrated one of the biggest frauds in the crypto industry," stated U.S. Attorney Damian Williams. "He lured ordinary, retail crypto investors into investing billions of dollars in Celsius with false promises that their investments were low-risk." Despite portraying Celsius as a safe investment platform, Mashinsky secretly engaged in high-risk ventures using customer funds and manipulated CEL prices to benefit personally.
Celsius Network positioned itself as a leading platform offering returns on crypto assets through programs like "Earn," "Custody," and "Borrow." However, it is alleged that Mashinsky misrepresented key aspects of Celsius’s business model to attract customers worldwide. By late 2021, Celsius had grown significantly but collapsed into bankruptcy by mid-2022.
Mashinsky's plea agreement includes forfeiting over $48 million gained from his illicit activities. His sentencing is set for April 8, 2024, before U.S. District Judge John G. Koeltl. The maximum sentence for his crimes could be up to 30 years in prison.
The investigation received support from the Federal Bureau of Investigation and other agencies like the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, who have filed parallel civil actions against Mashinsky.