U.S. authorities are pursuing a 20-year sentence for Alex Mashinsky, the former CEO of Celsius Network, due to his involvement in a scam that resulted in nearly $7 billion in losses for customers. He has confessed to misleading customers about the safety of their investments and covertly inflating the value of Celsius’s token, CEL, to profit himself.
Prosecutors stated that Alex Mashinsky pleaded guilty in December for lying about the safety of customer money and rigging Celsius’s CEL token, but still, he is not taking responsibility for his actions. Prosecutors also insisted that the Mashinskys’ crimes weren’t accidents or bad luck; they were intentional choices to lie, cheat, and steal to get rich.
Instead of accepting his crimes, he is blaming regulators, the market, and even his victims. As per the reports, in 2021, Celsius handled over $20 billion in cryptocurrency. Alex Mashinsky promoted it as a safer option than banks; he claimed that it offered high profits with little risk.
Moreover, these claims were fake. Celsius made risky loans without backup, traded dangerously, and used customer money to secretly boost its own CEL token’s price, all while telling customers their money was secure.
Alex Mashinsky sold over $48 million of Celsius’s CEL token at artificially high prices, even while telling his customers that he was holding onto his tokens like they were. In July 2022, when Celsius went bankrupt, it left $4.7 billion of customer money stuck. After the bankruptcy, customers were short over $1 billion, and with today’s higher crypto prices, the total loss is now estimated at $7 billion.
Apart from him, other Celsius co-founders who are also pledged as guilty for bankrupt crypto traders are Daniel Leon and Hanoch Goldstein.
Prosecutors also argue that Mashinsky needs a long prison sentence to show how serious his crimes were, to respect the law, and to warn other crypto bosses not to cheat customers for personal gain. Judge John G. Koeltl will decide Mashinsky’s sentence on May 8.
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