Alex Mashinsky Pleads Guilty to Fraud Charges in Celsius Network Case

Alex Mashinsky, the founder and former CEO of cryptocurrency lender Celsius Network, pleaded guilty on Tuesday to two counts of fraud.

Initially indicted on July 13, 2023, on seven counts of fraud, conspiracy, and market manipulation, Mashinsky admitted to commodities fraud and manipulating the price of Celsius' proprietary token, CEL, during a hearing before U.S. District Judge John Koeltl.

In court, Mashinsky confessed to misleading Celsius customers in a 2021 interview by falsely claiming that its "Earn" program had received regulatory approval. The program offered investment returns by deploying customers' cryptocurrency assets. Mashinsky also admitted to selling his CEL holdings without disclosing this to customers.

"I know what I did was wrong, and I want to try to do whatever I can to make it right," he said.

Mashinsky faces a maximum sentence of 30 years for the two counts, per his plea deal. He agreed not to appeal any sentence within this range. Sentencing is scheduled for April 8, 2025.

Prosecutors revealed that Mashinsky personally gained around $42 million by selling CEL at inflated prices, leaving customers at a loss when Celsius went bankrupt. "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," said Damian Williams, the U.S. Attorney for Manhattan.

Celsius, founded in 2017, filed for Chapter 11 bankruptcy in July 2022 after customers rushed to withdraw deposits amid plummeting crypto prices. The company exited bankruptcy in January 2023 and shifted its focus to Bitcoin mining.

Mashinsky joins a growing list of crypto executives charged with fraud following the 2022 downturn, including FTX founder Sam Bankman-Fried, who was sentenced to 25 years in prison in March after stealing $8 billion from customers.

Celsius’ former chief revenue officer, Roni Cohen-Pavon, pleaded guilty in September 2023 and is cooperating with prosecutors.

While the broader crypto market has rebounded due to optimism surrounding President-elect Donald Trump’s anticipated pro-crypto policies, the fallout from the 2022 crash continues to unfold.