Alex Mashinsky, who was charged on July 13, 2023 with fraud, conspiracy and market manipulation, admitted to deceiving Celsius Network users during a hearing before US District Judge John Koeltl on Tuesday.
Mashinsky, 59, founder of the lending platform, confessed guilt to charges of commodity fraud and in a fraudulent scheme to manipulate the price of Celsius’ native CEL token.
In court, Mashinsky revealed that he gave Celsius customers “false comfort” by claiming in a 2021 interview that the company had received regulatory approval for its “Earn” program, which was false. This program allowed users to earn returns on their cryptocurrency deposits. Furthermore, Mashinsky also failed to disclose that he had been selling his own CEL holdings.
As part of the plea deal with prosecutors, Mashinsky agreed not to appeal any sentence of up to 30 years, the maximum he faces on these two charges. Sentencing is scheduled for April 8, 2025.
Celsius, founded in 2017, was forced to file for Chapter 11 bankruptcy in July 2022 after a mass exodus of customers attempted to withdraw their funds amid a drop in cryptocurrency prices.
Initially, many users found themselves without access to their investments. In fact, as this media reported in August, the company has paid up to $2.5 billion in dollars and cryptocurrencies to its creditors. After emerging from bankruptcy on January 31, the company has reoriented its operations towards Bitcoin mining, as reported by NoticiasVE.
After Mashinsky’s guilty plea was known, the CEL token reacted upward, rising 12%, going from 0.25 dollars to 0.30 dollars. Then it corrected and is trading above USD 0.26 at the close of this report.
This article was created using artificial intelligence and edited by a human Editor.