Alex Mashinsky, the founder and former CEO of bankrupt cryptocurrency lender Celsius Network, has pleaded guilty to two counts of fraud, admitting to deceiving customers and manipulating the value of the platform’s proprietary token. The plea, entered on Tuesday in a New York federal court, comes as part of a deal with prosecutors ahead of a trial that was scheduled to begin next month.
Mashinsky, 59, initially faced seven charges, including fraud, conspiracy, and market manipulation, after his indictment in July 2023. Prosecutors alleged that he misled investors to pour funds into Celsius and inflated the price of the company’s in-house cryptocurrency, Cel. During a hearing before US District Judge John Koeltl, Mashinsky admitted guilt to two of the charges: commodities fraud and a scheme to manipulate the price of Cel.
In court, Mashinsky confessed to providing false assurances in a 2021 interview, claiming that Celsius’ “Earn” programme, which offered to invest customers’ cryptocurrency assets to generate returns, had received regulatory approval when it had not. He also failed to disclose his own sales of Cel tokens during the same period.
“I know what I did was wrong, and I want to try to do whatever I can to make it right,” Mashinsky told the court.
Under the terms of his plea deal, Mashinsky has agreed not to appeal any sentence of 30 years or less. He is set to be sentenced on April 8, 2025. Prosecutors revealed that Mashinsky personally profited approximately $42 million by selling Cel tokens at inflated prices, leaving customers to bear the financial losses when Celsius filed for bankruptcy.
“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, US Attorney in Manhattan, in a statement on Tuesday.
Celsius filed for Chapter 11 bankruptcy protection in July 2022, leaving many customers unable to access their deposits. The company has since exited bankruptcy and shifted its focus to Bitcoin mining. Mashinsky’s lawyer, Marc Mukasey, emphasized the importance of accountability, stating, “Sometimes, accepting responsibility when and where appropriate is the best way to help everybody move on.”
The case is part of a broader crackdown on crypto executives following the market collapse in 2022, which saw several high-profile failures, including the now-defunct exchange FTX. Sam Bankman-Fried, FTX’s founder, was convicted of defrauding customers out of $8 billion in November 2023 and sentenced to 25 years in prison earlier this year.
Celsius’ former chief revenue officer, Roni Cohen-Pavon, pleaded guilty in September 2023 and is cooperating with the investigation. Meanwhile, the cryptocurrency market has experienced a resurgence, with digital assets like Bitcoin climbing in value amid optimism over President-elect Donald Trump’s pro-crypto policy stance.
