Alex Mashinsky has admitted to two counts of fraud and manipulation of the market. He agreed to be sentenced to 30 years of prison.
Mashinsky was indicted in July 2023 on seven counts, including fraud, conspiracy, and manipulation of the market for Celsius’ token, CEL. Mashinsky waived the right to appeal any sentences below 360-months in prison under the terms of this agreement.
During a Dec. 3 hearing before US District Judge John Koeltl in Manhattan, Mashinsky acknowledged his role in misleading Celsius customers to invest in the platform and artificially inflating the value of CEL to benefit personally and bolster the company’s financial standing.
Mashinsky, according to federal prosecutors, used deceptive methods to attract investors to Celsius by promising them high returns for deposits and manipulating its native token value. They also estimate that he made $42 million in profit from the sale of his assets.
Mashinsky’s guilty plea follows that of Roni Cohen-Pavon, Celsius’ former chief revenue officer, who pleaded guilty in September 2023 and agreed to cooperate with the ongoing investigation. Cohen-Pavon’s cooperation could provide further details about Celsius’s inner workings and leadership, potentially leading to more charges.
The collapse
Mashinsky’s case is part of a broader wave of regulatory and legal action in the wake of the 2022 collapse of several major crypto firms, most notably the implosion of the FTX exchange.
In July 2022, after the sharp drop in cryptocurrency asset prices led to a surge of withdrawal requests by customers, CED, once one of leading crypto-lenders, filed Chapter 11 bankruptcy.
As the company sought to restructure, many customers were locked out of funds. Celsius emerged from bankruptcy officially in January 2023, and its focus shifted to Bitcoin mining.
Mashinsky’s legal troubles follow several other high-profile figures accused of criminal wrongdoing. In November 2023, Sam Bankman-Fried, the founder of FTX, was convicted of stealing roughly $8 billion from the exchange’s customers and sentenced to 25 years in prison in March 2024.
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