Celsius founder Alex Mashinsky gets 12 years jail for crypto fraud
NEW YORK : Alex Mashinsky, the founder and former chief executive of bankruptcy cryptocurrency lender Celsius Network, was sentenced yesterday to 12 years in prison after pleading guilty in December to securities fraud and commodities fraud.
Mashinsky's sentence was imposed by US district judge John Koeltl in Manhattan, and is among the longest in a criminal case arising from the 2022 meltdown in cryptocurrency markets.
Sam Bankman-Fried, who led the FTX exchange, is serving a 25-year prison sentence after being convicted of fraud.
He is appealing.
Federal prosecutors said Mashinsky, 59, misled customers about Celsius' safety, and artificially inflated the value of Celsius' proprietary token Cel.
They sought a prison term of at least 20 years, calling it 'just punishment' for Mashinsky's having victimised thousands of people and caused billions of dollars in losses, while drawing more than US$48 million of personal benefits.
'The case for tokenisation and the use of digital assets is strong but it is not a license to deceive,' US attorney Jay Clayton in Manhattan said in a statement.
Mashinsky sought one year and one day in prison, saying he felt remorse and wanted to do right by his family and former Celsius customers.
His sentence includes three years of supervised release and a US$48.4 million forfeiture.
Lawyers for Mashinsky were not immediately available to comment.
Founded in 2017, Hoboken, New Jersey-based Celsius filed for Chapter 11 bankruptcy in July 2022 after customers rushed to withdraw deposits as cryptocurrency prices fell.
Born in Ukraine, Mashinsky emigrated with his family to Israel, and moved to New York after visiting the city in 1988.
Cryptocurrency lenders have promised easy loan access and high interest rates to depositors while lending tokens to institutional investors, hoping to profit from the difference.
Celsius offered 17% interest on some deposits, but had a US$1.19 billion balance sheet deficit when it sought bankruptcy protection.
Mashinsky has also faced civil lawsuits by the US securities and exchange commission, US commodity futures trading commission, US federal trade commission and New York attorney-general Letitia James.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
a day ago
- Malay Mail
Fraudsters turn to TikTok and AI as scams hit Malaysia's youth hardest
KUALA LUMPUR, Aug 16 — Fraud syndicates in Malaysia are exploiting social media and artificial intelligence (AI) to deploy sophisticated scams that blend child sexual exploitation, extortion and illegal content sales, with teenagers as their primary victims. Malaysian Cyber Consumers Association (MCCA) president Siraj Jalil said scam tactics have dramatically evolved over the past decade, from traditional Macau, romance and parcel scams to complex, multi-layered cybercrimes. He highlighted a scam involving 'sugar mummy' service offers on TikTok to lure teenagers, coercing them to share personal content classified as Child Sexual Exploitation Material (C-SET). Victims are then extorted for thousands of ringgit to avoid public exposure. 'Even after ransom payments, syndicates continue selling the compromising material on platforms like Telegram to paedophile communities,' Siraj told Bernama Radio today. He also warned social media merchants face new risks of being falsely accused when scammers duplicate their ads, deceive buyers and exploit buyer information to defraud the genuine sellers. When victims report fraud, the legitimate merchants' accounts may be frozen under suspicion, he added. Siraj also noted modern scams increasingly use AI-generated fake content, leaked data from major tech companies like Meta, and social engineering to study victim behaviour. To address these threats, the National Scam Response Centre (NSRC) now operates 24/7 with an expanded cybercrime mandate. He urged parents to closely monitor their children's online activity and called on the government to provide AI literacy education for the public. Cybercrime victims can seek help via MCCA's website at — Bernama
Malay Mail
a day ago
- Malay Mail
Legal spotlight falls on Roblox as US state sues over child safety and online predators
SAN FRANCISCO, Aug 16 — The US state of Louisiana has filed a lawsuit accusing Roblox of facilitating the exploitation of children, prompting the online game platform to reject the claim as 'untrue' yesterday. A lawsuit filed by Louisiana Attorney General Liz Murrill contends that Silicon Valley-based Roblox facilitates distribution of child sexual abuse material and the exploitation of minors. 'Roblox is overrun with harmful content and child predators because it prioritises user growth, revenue, and profits over child safety,' Murrill maintained in a release. The lawsuit charges Roblox with 'knowingly and intentionally' failing to implement basic safety controls to protect children. Nearly 82 million people use Roblox daily, with more than half of them being younger than 18 years of age, according to the suit. 'Any assertion that Roblox would intentionally put our users at risk of exploitation is simply untrue,' the company said yesterday in a posted response to the filing. 'No system is perfect and bad actors adapt to evade detection,' the company added, stressing that it works 'continuously' to promote a safe online environment on the platform. The Roblox online gaming and creation platform was founded in 2004 and allows users to play, create and share virtual experiences. Roblox is one of the most popular online platforms for children, 'offering a vibrant world of interactive games, imaginative play, and creative self-expression,' according to the nonprofit Family Online Safety Institute (FOSI). A FOSI guide available at its website 'walks parents through the basics of Roblox, the ways children commonly engage with it, and how to use built-in features like content filters, chat settings, and screen time controls' for safety. Roblox announced major safety upgrades late last year, introducing remote parental controls and restricting communication features for users under 13. US-based FOSI endorsed the changes at the time, its chief saying Roblox was taking 'significant steps toward building a safer digital environment.' — AFP
Malay Mail
2 days ago
- Malay Mail
Boost-phase defence and four layers of interceptors: Pentagon's blueprint for Trump's US$175b Golden Dome
WASHINGTON, Aug 16 — US President Donald Trump has picked a design for his Golden Dome missile defence system and named a leader of the ambitious US$175 billion (RM738.4 billion) defence programme. Here are some key details about the project: How will it work? The big new aim is for Golden Dome to leverage a network of hundreds of satellites circling the globe with sophisticated sensors and interceptors to knock out incoming enemy missiles after they lift off from countries like China, Iran, North Korea or Russia. In April, the Pentagon asked defence contractors how they would design and build a network to knock out intercontinental ballistic missiles during the 'boost phase' just after lift-off — the slow and predictable climb of an enemy missile through the Earth's atmosphere. Existing defences target enemy missiles only midway through their travels through space. The idea and new capability is that once the missile has been detected, Golden Dome will either shoot it down before it enters space with an interceptor or a laser, or shortly into its path of travel in space. Another new idea in the plan is to add additional defences on US soil. A blueprint of the plan presented by the Pentagon to industry in August and first reported by Reuters, revealed that in addition to the space-based intercept layer, the system will have another three land-based layers. An existing missile defence system named the Ground-Based Midcourse Defence system that uses land-based interceptors stationed in California and Alaska will be enhanced to create the second layer, according to the Pentagon presentation. The concept unveiled in August also included a third layer consisting of five land-based launch sites intended to intercept inbound missiles while they are still in space. Three of those five would be located in the continental United States, while the remaining two would be in Hawaii and Alaska. The fourth intercept layer would be for 'Limited Area Defence', meant to protect population centres. The concept includes new radars, a brand new 'common' launcher that will launch current and future interceptors and may include the existing Patriot missile defence system. These would work in concert to defeat all threat types, such as hypersonic weapons and cruise missiles, the Pentagon said. 'I promised the American people that I would build a cutting-edge missile defence shield to protect our homeland from the threat of foreign missile attack,' Trump said when he made the announcement in May. Is Golden Dome like Israel's Iron Dome? 'We helped Israel with theirs, and [it] was very successful, and now we have technology that's even far advanced from that,' Trump said, referring to Israel's Iron Dome missile defence system. The short-range Iron Dome air defence system was built to intercept the kinds of rockets fired by the Palestinian group Hamas in Gaza. Developed by Israel's Rafael Advanced Defence Systems with US backing, it became operational in 2011. Each truck-towed unit fires radar-guided missiles to blow up short-range threats like rockets, mortars and drones in mid-air. The system determines whether a rocket is on course to hit a populated area; if not, the rocket is ignored and allowed to land harmlessly. Iron Dome was originally billed as providing city-sized coverage against rockets with ranges of between 4 and 70 km, but experts say this has since been expanded. How is it similar to then-president Ronald Reagan's Star Wars initiative? 'We will truly be completing the job that President Reagan started 40 years ago, forever ending the missile threat to the American homeland,' Trump said in May. The idea of strapping rocket launchers, or lasers, to satellites so they can shoot down enemy intercontinental ballistic missiles is not new. It was part of the Star Wars initiative devised during the presidency of Ronald Reagan. But it represents a huge and expensive technological leap from current capabilities. Reagan's 'Strategic Defence Initiative,' as it was called, was announced in 1983 as groundbreaking research into a national defence system that could make nuclear weapons obsolete. The heart of the SDI programme was a plan to develop a space-based missile defence programme that could protect the US from a large-scale nuclear attack. The proposal involved many layers of technology that would enable the United States to identify and destroy automatically a large number of incoming ballistic missiles as they were launched, as they flew, and as they approached their targets. SDI failed because it was too expensive, too ambitious from a technology perspective, could not be easily tested and appeared to violate an existing anti-ballistic missile treaty. Who will build Golden Dome? One-time Trump ally Elon Musk's rocket and satellite company SpaceX had emerged as a frontrunner alongside software firm Palantir and drone maker Anduril to build key components of the system. But the effort may have faltered when the Trump administration side-lined the concept of Golden Dome as a paid-for service not owned by the government. Many of the early systems are expected to come from existing production lines. Attendees at the White House press conference with Trump named L3Harris Technologies, Lockheed Martin and RTX Corp as potential contractors for the massive project. L3 has invested US$150 million in building its new facility in Fort Wayne, Indiana, where it makes the Hypersonic and Ballistic Tracking Space Sensor Satellites that are part of a Pentagon effort to better detect and track hypersonic weapons with space-based sensors and could be adapted for Golden Dome. But Golden Dome's funding remains uncertain. Republican lawmakers have proposed a US$25-billion initial investment for it as part of a broader US$150-billion defence package, but this funding is tied to a contentious reconciliation bill that faces significant hurdles in Congress. — Reuters
