Another former crypto mogul is facing years behind bars. Alex Mashinsky, the 59-year-old founder of the failed multibillion-dollar crypto lender Celsius Network, has pleaded guilty to two counts of fraud.
According to Inner City Press reports from the court, Mashinsky admitted that he induced investors to sell their bitcoin (BTC) to Celsius by making false statements about its Earn program, which was designed to pay up to 18% interest on their deposits.
Moreover, the founder pleaded guilty to manipulating the price of CEL, the native token of the Celsius Network, by making untrue statements.
"I said that Celsius had approval from regulators. It was false. I falsely said I was not selling my CEL tokens. I accept full responsibility for my actions," Mashinsky was quoted as saying, adding that he knew it was wrong and illegal.
In this case, the maximum sentence for the two counts of fraud is thirty years.
The sentencing is scheduled for April 8th, 2025.
Reacting to the news, X user Robert Baillie said, "The length of his sentence should be based on how much money he returns to Celsius creditors."
The company collapsed in 2022 with more than $1 billion in debt. Just around four months later, another crypto giant, FTX, collapsed, sending even larger shockwaves through the industry. This year, FTX boss Sam Bankman-Fried was sentenced to 25 years in prison.
Meanwhile, in January this year, Celsius announced that it had emerged from bankruptcy and started distributing over $3 billion of cryptocurrency to creditors. By August, $2.53 billion had already been distributed to more than 251,000 creditors, while another round of $127 million payouts is expected to begin soon.
This situation has also been exploited by scammers, who send false emails regarding the return of funds, pretending to be from Celsius and attempting to trick victims into clicking on fraudulent links to steal their crypto assets.
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