In a surprising twist of events, Alex Mashinsky, the creator of the now-defunct digital currency lending platform Celsius Network, has confessed to engaging in fraudulent activities in the United States.
Initially facing a total of seven charges which included deceit and manipulation of the market, Mashinsky admitted to two counts of fraud aimed at misleading Celsius users and artificially inflating the value of his company’s digital tokens.
This admission of guilt by Mashinsky represents a significant milestone in the ongoing legal disputes surrounding the collapse of Celsius Network.
Confession of Celsius Network’s Founder
Addressing the court during a lengthy session in a federal court in Manhattan, Mashinsky expressed remorse over his actions.
“I am aware that my behavior was unethical, and I am dedicated to rectifying my wrongdoings,” Mashinsky confessed to Judge John Koeltl.
Additionally, he stated, “I take full accountability for my misconduct.”
Agreement for Repayment of $48 million by Alex Mashinsky
As part of the agreement reached with U.S. authorities, Mashinsky has consented to reimbursing $48 million in unlawfully acquired funds, as confirmed by the U.S. Attorney’s Office for the Southern District of New York.
Moreover, in exchange for this repayment, Mashinsky has agreed to waive any appeals if sentenced to a maximum of 30 years for the two fraud charges.
It has been disclosed by federal prosecutors that in addition to the aforementioned sum, Mashinsky profited an extra $42 million through the sale of his shares in Celsius’s Cel token.
Presently, Mashinsky’s sentencing is scheduled for April 8, 2025, before Judge Koeltl.
Delving further into the topic, U.S. Attorney Damian Williams expressed in a statement, “Mashinsky amassed substantial wealth by selling CEL tokens at artificially inflated prices, leaving his clients in a state of financial ruin following the company’s collapse.”
Established in 2017, Celsius sought bankruptcy protection in July 2022 amidst a surge in customer withdrawals triggered by the plummeting cryptocurrency market.
In the aftermath of the crypto market crash in 2022, multiple firms, including FTX, faced insolvency, leading to Mashinsky’s indictment for fraudulent activities.