Celsius founder and former CEO Alex Mashinsky is facing up to 30 years of jail time after pleading guilty to charges linked to the collapse of the bankrupt crypto lender.
According to the U.S. Attorney’s Office, Southern District of New York, Mashinsky on Tuesday pleaded guilty to one count of committing commodities fraud for misleading customers about Celsius’ profitability and the nature of the investments that the company made.
Mashinsky also pleaded guilty to one count of committing securities fraud, which involved illegally manipulating and artificially inflating the price of Celsius’ CEL token. The scheme enabled the 59-year-old to sell his own holdings for a substantial profit, earning him millions in gains.
U.S. Attorney for the Southern District of New York Damian Williams says Mashinsky orchestrated one of the biggest frauds in the crypto industry.
“He lured ordinary, retail crypto investors into investing billions of dollars in Celsius with false promises that their investments were low-risk. Using catchy slogans like ‘Unbank Yourself,’ Mashinsky promised that Celsius would keep customers’ crypto as safe as money in a bank, but that, unlike a bank, Celsius returned most of the profits from its business back to users. In reality, Celsius was never profitable.”
Mashinsky will forfeit over $48 million in proceeds from his schemes as part of the plea deal. Reuters reports he also agreed not to appeal any sentence of 30 years or less.
The sentencing is set for April 8th.
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