Alex Mashinsky Pleads Guilty to Fraud in Celsius Network Collapse

• Alex Mashinsky pleads guilty to fraud
• Celsius Founder Admits to Manipulating CEL Token
• Celsius collapse reveals $1,2 billion deficit

Alex Mashinsky, founder and former CEO of now-bankrupt crypto lending platform Celsius Network, has pleaded guilty to two counts of fraud related to the company's collapse. At a hearing in the United States District Court for the Southern District of New York, Mashinsky admitted to committing commodities fraud and securities fraud, acknowledging that his actions harmed Celsius investors and customers.

Authorities accused Mashinsky of trick customers about Celsius’ financial health and manipulating the market for the company’s proprietary token, CEL. He allegedly sold his holdings of the token at inflated prices, reaping approximately $48 million in profits before Celsius collapsed. In July 2023, Mashinsky was indicted on seven counts, including fraud, conspiracy, and market manipulation. He initially pleaded not guilty and unsuccessfully attempted to have two of the charges dismissed.

During the hearing, Mashinsky admitted to providing Celsius customers with false information, giving them a “false sense of security.” He confessed to falsely claiming that Celsius had regulatory approval and that it was not selling its CEL tokens. “I know what I did was wrong, and I want to try to do whatever I can to make things right,” Mashinsky told the court.

As part of the plea deal, Mashinsky agreed to disgorge more than $48 million in illegally gained profits. He also agreed not to appeal any sentence of 30 years or less, which is the maximum sentence for the two charges to which he pleaded guilty. Sentencing is scheduled for April 8, 2025.

Celsius Network, founded in 2017, offered cryptocurrency lending and deposit services, promising high returns to investors. However, in 2022, the company stopped customer withdrawals and filed for bankruptcy, revealing a $1,2 billion deficit on its balance sheet. Celsius’ collapse was one of the most significant in the cryptocurrency industry, affecting thousands of investors.

The case highlights the growing scrutiny of cryptocurrency executives. Mashinsky joins other prominent industry figures facing potential prison sentences, including former FTX CEO Sam Bankman-Fried, who was sentenced to 25 years in prison, and former Binance CEO Changpeng Zhao, who pleaded guilty and served four months in detention.

In addition to Mashinsky, Celsius’ former chief revenue officer Roni Cohen-Pavon also pleaded guilty to four criminal charges in September 2023 and is awaiting sentencing. Celsius, under new management, is cooperating with the investigation and is seeking ways to compensate customers affected by the collapse.