Alex Mashinsky, the founder and former CEO of the cryptocurrency lender Celsius Network, has pleaded guilty to two counts of fraud in a Manhattan federal court on December 4, 2024. This plea comes after he was indicted on July 13, 2023, on seven counts related to fraud, conspiracy, and market manipulation.
During the hearing, Mashinsky admitted to misleading Celsius customers about the company's 'Earn' program, falsely claiming it had received regulatory approval. He also acknowledged failing to disclose his sale of CEL tokens, the proprietary cryptocurrency of Celsius.
As part of his plea agreement, Mashinsky has committed to not appeal any sentence of 30 years or less, which is the maximum penalty he faces for the two counts to which he pleaded guilty. His actions contributed to the collapse of Celsius, which filed for Chapter 11 bankruptcy protection in July 2022 as falling crypto prices led to a rush of customer withdrawals.
Mashinsky is among several crypto executives facing legal challenges following a significant downturn in the cryptocurrency market that began in 2022. His case is part of a broader investigation into fraudulent practices within the crypto industry, which has faced increased scrutiny as a result of high-profile bankruptcies.
In related developments, Roni Cohen-Pavon, Celsius's former chief revenue officer, also pleaded guilty in September 2023 and has agreed to cooperate with prosecutors.