Alex Mashinsky admits fraud in Celsius collapse scandal

Alex Mashinsky, the founder and former CEO of the now-bankrupt Celsius Network (CRYPTO:CEL), pleaded guilty to two counts of fraud on December 3, 2024.

His guilty plea comes amid a series of charges related to the operations and collapse of the crypto lending platform in 2022.

Mashinsky faces a maximum sentence of 30 years in prison, or 360 months.

He was arrested in July 2023 and initially charged with seven criminal counts, including securities fraud, commodities fraud, wire fraud, and conspiracy to manipulate the price of Celsius' native token, CEL.

In court, Mashinsky admitted to misleading investors by falsely claiming that Celsius had regulatory approval and denying that he was selling his CEL tokens.

“I said that Celsius had approval from regulators. It was false. I accept full responsibility for my actions,” he stated during the proceedings.

Mashinsky had previously pleaded not guilty and sought to dismiss two charges related to commodities manipulation and market manipulation.

However, U.S. District Court Judge John G. Koeltl ruled that his attorney's arguments were “without merit,” leading Mashinsky to face the full indictment if he went to trial.

Celsius halted withdrawals in June 2022 amidst “extreme market conditions” following the collapse of Terra/LUNA.

The company subsequently filed for Chapter 11 bankruptcy protection in July 2022, marking one of several high-profile bankruptcies in the cryptocurrency sector during that period.

Despite external pressures from market collapses, the financial troubles at Celsius were largely attributed to its management practices.

Prior to its downfall, Mashinsky had repeatedly assured customers that Celsius did not engage in uncollateralized lending practices, a claim that was later proven false when it was revealed that the company had a $1.2 billion shortfall on its balance sheet.

Mashinsky is scheduled for sentencing in Manhattan on April 8, 2025.

At the time of reporting, the Celsius Network (CEL) price was $0.2691.