In an unexpected twist of events, Alex Mashinsky, the creator of the now-defunct digital currency lending platform Celsius Network, has admitted to two instances of misconduct in the United States.
To provide background, Mashinsky had initially faced seven charges, including deceit and manipulation of the market, for deceiving Celsius users and artificially boosting the value of his company’s digital token.
His admission of guilt signals a pivotal moment in the ongoing legal dispute surrounding the collapse of Celsius Network.
Mashinsky confesses to crypto fraud
Commenting on the matter, Mashinsky confessed to Judge John Koeltl during the lengthy session in a federal court in Manhattan.
“I recognize the wrongdoing in my actions and I am committed to rectifying it.”
He went on to say,
“I take full accountability for my behavior.”
Agreement for Repayment of $48 million by Alex Mashinsky
Under the terms of the agreement with U.S. prosecutors, Mashinsky has agreed to reimburse $48 million obtained fraudulently, as verified by the U.S. Attorney’s Office for the Southern District of New York.
Additionally, Mashinsky has pledged to abstain from appealing if handed a sentence of 30 years or less, the maximum penalty for the two counts of fraud.
Furthermore, Federal prosecutors disclosed that Mashinsky garnered an extra $42 million through the sale of his shares in Celsius’s exclusive Cel token.
As of the most recent information, Mashinsky is set for sentencing on April 8, 2025, before Judge Koeltl.
Adding perspective to the situation, Damian Williams, the U.S. Attorney in Manhattan, stated,
“By selling his own CEL at artificially inflated prices, Mashinsky pocketed millions, leaving his clients in the lurch when the business went bankrupt.”
Established in 2017, Celsius declared bankruptcy in July 2022 following a spike in customer withdrawals amid declining digital currency values.
In the aftermath of the 2022 digital currency market crash, several companies, including FTX, folded, and Mashinsky was indicted for fraudulent activities.