- Alex Mashinsky pleads guilty to fraud and agrees to return $48 million in proceeds.
- Celsius filed for bankruptcy in 2022 and shifted to Bitcoin mining after emerging in 2023.
In a surprising development, Alex Mashinsky, the founder of the now-defunct cryptocurrency lending platform Celsius Network, has pleaded guilty to two counts of fraud in the U.S.
For context, Mashinsky was initially charged with seven counts, including fraud and market manipulation, for misleading Celsius users and inflating his company’s crypto token value.
As expected, his guilty plea marks a significant turning point in the ongoing legal battle surrounding Celsius Network’s collapse.
Celsius crypto founder pleads guilty
Remarking on the same, Mashinsky told Judge John Koeltl during the hour-long hearing in Manhattan federal court.
“I know what I did was wrong and I want to do what I can to make it right.”
He added,
“I accept full responsibility for my actions.”
Alex Mashinsky to repay $48 million
As part of his plea agreement with U.S. prosecutors, Mashinsky has agreed to return $48 million in fraudulent proceeds, as confirmed by the U.S. Attorney’s Office for the Southern District of New York.
In exchange, Mashinsky also committed to forgoing any appeal if sentenced to 30 years or less, the maximum penalty for the two fraud counts.
That being said, Federal prosecutors further revealed that Mashinsky personally profited an additional $42 million through the sale of his holdings in Celsius’s proprietary Cel token.
Now as of the latest update, Mashinsky is scheduled for sentencing on 8th April 2025, before Judge Koeltl.
Providing further insights on the matter, Damian Williams, the U.S. Attorney in Manhattan, said in a statement,
“Mashinsky made tens of millions of dollars selling his own CEL at artificially high prices, while his customers were left holding the bag when the company went bankrupt.”
Founded in 2017, Celsius filed for bankruptcy in July 2022 after a surge in customer withdrawals due to falling crypto prices.
Following the 2022 crypto crash, several firms, including FTX, collapsed, and Mashinsky was charged with fraud.
