Celsius Founder Alex Mashinsky Pleads Guilty to Fraud Charges, Faces Up to 30 Years in Prison

Alex Mashinsky, the founder and former CEO of Celsius Network, has pleaded guilty to two counts of fraud. This happened on a Tuesday, and it's quite a turn from his initial not guilty plea.

During a hearing before a U.S. District Judge, Mashinsky admitted to two of the seven charges against him, according to a report from Reuters. The charges include commodities fraud and a scheme to manipulate the price of Celsius' in-house token, CEL/USD.

Mashinsky confessed that he misled Celsius customers. He provided them with “false comfort” by claiming in a 2021 interview that Celsius had received regulatory approval for its “Earn” program. He also admitted to not disclosing that he had been selling his CEL holdings.

He stated, “I know what I did was wrong, and I want to try to do whatever I can to make it right.” Mashinsky agreed not to appeal any sentence of 30 years or less, which is the maximum for these counts. His sentencing is set for April 8, 2025.

Financial commentator Peter Schiff remarked that it was “obvious” Mashinsky was a fraudster. He even shared an old clip of a debate he had with Mashinsky about Bitcoin's yield-generating potential.

In 2023, Mashinsky faced seven counts related to fraud, conspiracy, and market manipulation. His arrest followed the collapse of Celsius Network and a Department of Justice inquiry into the company's downfall. The Securities and Exchange Commission also filed a lawsuit against him and Celsius, alleging securities fraud.

Celsius was one of several major cryptocurrency companies that failed in 2022. The collapse of Terra LUNA/USD, along with a downturn in digital asset markets, left Celsius with a significant deficit. This made it unable to handle a surge in customer withdrawal requests, leading the company to file for bankruptcy protection in 2022.

However, in early 2024, Celsius successfully exited bankruptcy and began a $3 billion repayment plan to its creditors. This marked the end of an 18-month restructuring process after the Bankruptcy Court for the Southern District of New York approved the company’s reorganization plan.