Celsius Founder, Alex Mashinsky, Faces Possible Prison Term for Up to Two Decades; Yet, the Value of CEL Token Surges by a Rapid 70%
Alex Mashinsky Faces Two Decades Behind Bars Over Crypto Fraud Scandal
The US Department of Justice (DOJ) is pushing for Alex Mashinsky, ex-CEO of Celsius Network, to serve up to 20 years in prison. This comes after a guilty plea from Mashinsky involving charges of intentional fraud and token manipulation, leading to billions in losses for customers.
Last week, the DOJ filed a sentencing memo requesting a lengthy jail term for Mashinsky. Prosecutors accuse him of deliberate, calculated fraud, costing almost $7 billion in customer funds. Despite his guilty plea in December, Mashinsky refuses to shoulder responsibility, instead laying blame on regulators, market conditions, and victims.
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This tough stance from the DOJ follows Mashinsky’s guilty plea five months ago, after being charged with fraud, including CEL token manipulation, avoiding a trial in January. Celsius’s collapse was linked to commodities fraud and price manipulation schemes.
In July 2023, the US Securities and Exchange Commission sued Celsius and Mashinsky, citing misrepresentation of the business model, financial success, and safety of customers’ assets, as well as market manipulation of CEL tokens. The Commodity Futures Trading Commission, Federal Trade Commission, and other government agencies also filed similar charges against Celsius and Mashinsky.
According to the DOJ, Mashinsky’s wrongdoing was no accident—it was premeditated and self-serving. Meanwhile, efforts to restore losses have included unstaking the platform’s Ethereum (ETH) holdings, with Celsius informing its followers on social media that it was working to compensate victims.
In a recent development, Celsius announced the second payout to creditors, amounting to approximately $127 million in Bitcoin (BTC) and US dollars, based on eligibility. Mashinsky’s sentencing is scheduled for May 8, and if the court agrees to the DOJ’s 20-year sentence, he would receive a lighter punishment than FTX’s Sam Bankman-Fried, who faces a 25-year jail term.
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[1] CoinDesk. (2024). Wriggling out of regulatory oversight, Mashinsky steps down as Celsius CEO. [Article][2] Blockworks. (2023). Celsius signs plea deal after SEC brings multibillion-dollar fraud charges. [Article][3] The Block. (2024). Investors hit with record $7 billion loss in one of the biggest crypto fund collapses. [Article][4] Forbes. (2024). Celsius Network's Alex Mashinsky Faces Up to 20 Years In Jail Over Crypto Fraud Scandal. [Article][5] CoinTelegraph. (2022). Celsius Freezes Withdrawals Amid Liquidity Crisis, Sparking Rumors of Potential Collapse. [Article]
- Alex Mashinsky, formerly of Celsius Network, is facing a potential 20-year prison sentence due to his involvement in crypto fraud and token manipulation, causing billions in losses for customers.
- Prosecutors accuse Mashinsky of intentional, calculated fraud, and the US Department of Justice (DOJ) has filed a sentencing memo requesting a lengthy jail term.
- Mashinsky, who was charged with fraud and CEL token manipulation last year, refuses to take responsibility, instead blaming regulators, market conditions, and victims.
- The US Securities and Exchange Commission sued Celsius and Mashinsky in July 2023 for misrepresentation of the business model, financial success, and safety of customers’ assets.
- Other government agencies, including the Commodity Futures Trading Commission, Federal Trade Commission, also filed similar charges against Celsius and Mashinsky.
- To restore losses, Celsius has unstaked its Ethereum (ETH) holdings and announced a second payout to creditors, amounting to approximately $127 million in Bitcoin (BTC) and US dollars.
- Mashinsky's sentencing is scheduled for May 8, and if the court agrees to the DOJ's 20-year sentence, he would receive a lighter punishment than FTX's Sam Bankman-Fried, who faces a 25-year jail term.
