Latest news with #AlexMashinsky
Coin Geek
11-07-2025
- Business
- Coin Geek
Tether can't shake Celsius lawsuit; Bitfinex launches ‘stablechain'
Getting your Trinity Audio player ready... Tether has lost its bid to dismiss a claim by administrators of the bankrupt Celsius Network looking to claw back billions of dollars' worth of 'improperly' liquidated BTC tokens. June 30 brought a ruling by Judge Martin Glenn in the U.S. Bankruptcy Court for the Southern District of New York in the case pitting Celsius Debtors against Tether, issuer of the market-leading USDT stablecoin. (Comically, the filing declares it to be the 'PUNITED STATES' court, which we'll assume is a typo, but hey, grounds for appeal?) First, some background. The suit was filed last August based on the Debtors' belief that Tether had crossed legal lines by selling nearly 40,000 BTC tokens—currently worth ~$4 billion—that Celsius had put up as collateral for USDT-based loans. Celsius went bankrupt in July 2022 in a haze of criminal fraud allegations, for which founder Alex Mashinsky was sentenced to 12 years in prison earlier this year. Celsius was effectively a Ponzi scheme from its inception, forcing Mashinsky to be constantly borrowing from one source to pay others. The latter category included Celsius customers, who purchased and staked the platform's native CEL token based on Mashinsky's promises of massive returns for doing so. Tether's ties to Celsius went beyond merely providing loans that the company couldn't get from a bank. As Mashinsky's own emails indicate, Tether was using Celsius to service 'all their US clients,' including market-makers Cumberland, Jump, and others. But as 2022's wave of crypto frauds, bankruptcies, and implosions began, BTC's price began to fall. This prompted Tether to issue margin calls requiring additional collateral to support the $512 million in USDT that Celsius had borrowed. Over a six-week period ending on June 12, 2022, Celsius sent nearly 17,000 additional BTC to Tether. These BTC transfers occurred during the 90-day period preceding Celsius' filing for bankruptcy, which under the U.S. Bankruptcy Code, are eligible to be 'clawed back' by bankruptcy administrators. Celsius also borrowed another $300 million worth of USDT during this period, for which it transferred another 10,700 BTC to Tether. Over 2,200 of this BTC was excess collateral. As Celsius began to circle the drain, Tether declined to provide further USDT loans to Celsius and liquidated the BTC put up as collateral. This liquidation didn't honor the 10-hour waiting period following a margin call that was stipulated under the terms of the loans. An amended agreement that the parties signed in January 2022 stipulated that if Tether liquidated the Celsius BTC, any surplus proceeds were to be paid to Celsius. Instead, Tether sold the BTC at what Celsius claims were below-market prices and kept the proceeds for itself, an action that Celsius alleges cost the company $100 million. Last November, Tether filed to dismiss the Celsius claim, citing the plaintiffs' lack of standing, a lack of personal jurisdiction, and the plaintiffs' failure to state a claim upon which relief can be granted. Last week, Judge Glenn rejected most of Tether's arguments but dismissed Count IV of the complaint, which alleged that Tether had breached a covenant of good faith and fair dealing under the laws of the British Virgin Islands (Tether's home base at the time) by liquidating the BTC. However, Glenn gave Celsius leave to amend their complaint. As of last August, bankruptcy administrators had distributed $2.5 billion to 251,000 Celsius creditors, representing roughly two-thirds of the total number of former customers. Many of the remaining 121,000 creditors had yet to claim their owed funds, some because the amounts were trivial, others for reasons unknown (including the possibility that coming forward would require identifying themselves). Tether is by no means the only entity in the sights of the Celsius administrators. In March, Celsius sued Chainalysis, accusing the blockchain analytics firm of performing a knowingly fraudulent audit of Celsius' assets under management in 2020 and of misleading Celsius customers and investors. Stablecoin-based stablechain is called Stable In other Tether news, the Bitfinex digital asset exchange (which shares ownership with Tether) just announced details of its previously hinted plans to launch Stable, 'a dedicated Layer 1 stablechain optimized for payments using USDT.' This 'stablechain' aims to reduce transaction fees and speed up settlement times, while making the whole process accessible to everyday users, serving as 'rails for the real world.' The official Stable site claims USDT is 'the world's most used asset' (the citation behind this claim appears to be missing), and Bitfinex believes such a popular means of transferring funds 'deserves its own chain.' Left unsaid is the likely view that the owners of Bitfinex and Tether deserve their own transaction fees, rather than letting third-party USDT-friendly networks like TRON (where $80.7 billion of USDT currently resides) and Ethereum ($73.8 billion) take their cut. Stable appears to be part of a trend in which crypto companies launch their networks on which the native token is one under their control. Take Base, the Ethereum layer 2 network launched by Coinbase (NASDAQ: COIN) exchange, which relies on the USDC stablecoin issued by Circle (NASDAQ: CRCL), in which Coinbase holds an equity stake. The aim appears to be ensuring a stake in all on-chain activities, at least, the revenue-generating kind. According to Bitfinex, Stable will use USDT as its 'gas' token for transaction fees, 'eliminating the complexity of holding additional, volatile tokens.' Fees will be 'well below a fraction of a cent,' while peer-to-peer USDT transfers will be gas-free. The network will come with its own Stable Wallet, which will feature 'social login, debit/credit card integration, and human-readable wallet aliases.' Bitfinex claims its new network will be capable of handling 'thousands of transactions per second' while offering institutions 'guaranteed blockspace allocation, scalable batch processing, and robust security measures.' Cross-chain bridging will be possible using USDT0 and LayerZero tech, while decentralized app (dApp) developers have been told to go nuts on stablecoin use cases. Stable's roadmap is currently in 'Phase 1,' which includes launching the StableWallet and implementing StableBFT, aka 'a customized PoS [proof of stake] consensus protocol built on CometBFT.' (BFT, if you were wondering, stands for Byzantine fault tolerance.) Phase 2 involves enhancing transaction throughput via optimistic parallel execution, launching USDT transfer aggregators, and offering dedicated blockspace to enterprises. The final phase involves those aforementioned dApp tools and a consensus mechanism based on directed acyclic graphs. Last month, longtime crypto entrepreneur Gabriel Abed, who was named chairman of the Binance exchange's first board of directors last year, was identified as a strategic investor in Stable. Back to the top ↑ Tether: big in Bolivia While stablecoins appear to be on the cusp of mainstream acceptance as a payment mechanism in North America and Europe, those are markets in which Tether appears unable to participate due to its inability to abide by regulatory constraints. In the European Union, Tether has effectively opted out of the Markets in Crypto Assets (MiCA) stablecoin framework due to the requirement for larger issuers to hold the bulk of their fiat reserves in cash in local banks. In America, two different stablecoin bills will allow Tether a lengthy grace period but will also impose requirements that Tether has been unwilling to undertake on its own, including submitting its reserves to a comprehensive third-party audit. Tether CEO Paolo Ardoino, who praised Stable's upcoming launch last month and was credited in turn for 'advising' the Stable team, has begun publicly declaring the company's 'core mission' to be focused on supporting 'emerging markets where access to stable financial infrastructure is urgently needed.' Last month, Ardoino tweeted that '[i]n Bolivia, real prices in shops are displayed in USD₮.' The tweet included photos of products for sale in an airport duty free store. Another photo showed explanatory signage reading: 'Our products are priced in USDT (Tether), a stable cryptocurrency with a reference price reported daily by the Central Bank of Bolivia, based on the Binance cryptocurrency trading platform. You can pay in Bolivian Bolivianos (BOB) or US Dollars (USD). The conversion will be made based on the daily USDT rate.' Recently, Reuters reported that Bolivians were increasingly turning to tokens such as USDT to hedge against the depreciation of the local currency. Last November, Bolivia's Banco Bisa began offering USDT custody to its banking customers. However, a former Bolivia central bank executive told Reuters that daily USDT volumes in the country are only around US$600,000. That's a pittance compared to tradfi volume of $18-$22 million, while cash-based black market sales are around $12-$14 million. Bolivia's central bank reported last week that transactions using Electronic Payment Channels and Instruments for Virtual Assets totaled $294 million in the first half of 2025, a 530% rise over the same period last year. The bank said these digital tools 'have facilitated access to foreign currency transactions, including remittances, small purchases and payments, benefiting micro and small business owners across various sectors, as well as families nationwide.' Back to the top ↑ Ardoino finds beautiful game not so beautiful up close Tether is the unquestioned stablecoin market leader, with USDT's market cap crossing $158.3 billion on July 2, a new record high. But that doesn't seem to impress the owners of Juventus FC, a fixture in Italy's Serie A football league. In February, Tether announced that it had taken an 8.2% stake in Juventus, marking the first investment by a digital asset firm in a major European football club. The following month, Tether announced that its Juventus stake had increased to 10.12%, representing 6.18% of the club's voting rights. By April, the stake had risen to 10.7%, representing a total outlay of roughly €128 million. But on June 2, Ardoino tweeted that the club—which is majority owned by the Agnelli family's investment firm Exor NV—hadn't allowed Tether to participate in a planned capital increase that commenced in April. Ardoino later complained in an interview that Tether had only had 'very, very limited' communications with the club and Exor. On June 25, Bloomberg reported that Tether still hadn't met with Juventus but was pushing the club to allow Tether a seat on its board of directors. Juventus has reportedly said it plans to meet with Tether executives when its current season concludes, after which Exor will 'evaluate its position' regarding Tether. It's almost as if the Agnelli family had some reason to think partnering with Tether might not be the best thing for the club's image. Back to the top ↑ Watch: Teranode is the digital backbone of Bitcoin title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Yahoo
09-05-2025
- Business
- Yahoo
Celsius founder sentenced to 12 years in prison
The founder of cryptocurrency lender Celsius Network was sentenced to 12 years in prison on Thursday. Alex Mashinsky, the company's former CEO, pleaded guilty to securities fraud and commodities fraud in December. Federal prosecutors said Mashinsky artificially boosted the value of Celsius' Cel token and profited more than $48 million as a result. Prosecutors led by U.S. Attorney Jay Clayton also said Mashinsky misled customers about Celsius' safety. 'The case for tokenization and the use of digital assets is strong but it is not a license to deceive,' Clayton, who is based in Manhattan, said in a statement. The sentence includes three years of supervised release and forfeiture of the $48.4 million he made while leading the company. The prosecution had sought a sentence of at least 20 years for Mashinsky, 59, saying it would be 'just punishment' for the billions of dollars in losses he caused for thousands of people. The founder pushed for a one year and one day term, saying he was remorseful. The Hoboken, New Jersey-based Celsius had offered customers as much as 17% interest on some deposits, but as crypto prices plummeted in the summer of 2022, customers rushed to withdraw their cash. Celsius had a $1.19 billion balance sheet deficit when it sought Chapter 11 bankruptcy protection in July of that year. The 12-year sentence is one of the longest to arise from the 2022 crypto market meltdown that stemmed from the collapse of the crypto exchange FTX. That company's founder, Sam Bankman-Fried, is serving a 25-year sentence for fraud. He's currently appealing his conviction. In addition to the criminal trial, Mashinsky has had civil lawsuits filed against him by the Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Trade Commission, and New York Attorney General Letitia James. For the latest news, Facebook, Twitter and Instagram.
Time of India
09-05-2025
- Business
- Time of India
Celsius Network founder Alex Mashinsky gets 12 years of imprisonment for crypto fraud
Celsius Network founder and former CEO Alex Mashinsky has been sentenced to 12 years of prison in a crypto fraud case. According to a report by news agency Reuters, the founder of the bankruptcy cryptocurrency lender pleaded guilty in December to securities fraud and commodities fraud. He has now been sentenced to 12 years of jail by the U.S. District Judge John Koeltl in Manhattan. Operation Sindoor Operation Sindoor: India deploys warships forward as situation at LoC explodes Air siren warning sounded in Chandigarh, Ambala residents advised to stay indoors L-70 guns, Schilka, S-400: Weapons India used to intercept Pak drones Mashinsky's is among the longest in a criminal case arising from the 2022 meltdown in cryptocurrency markets, the report adds. Announcing the imprisonment, federal prosecutors said Mashinsky, 50, misled customers about how safe the company was and artificially boosted the value of its own cryptocurrency, Celsius. The prosecutors asked the court to give him at least 20 years in prison, calling it a "just punishment" for causing billions of dollars in losses and personally gaining over $48 million. "Digital assets have strong potential, but they are not a license to deceive," said U.S. Attorney Jay Clayton from Manhattan. Celsius Network founder pleads guilty Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 2025 Top Trending local enterprise accounting software [Click Here] Esseps Learn More Undo As mentioned before, Mashinsky pleaded guilty last year in December. He said that he felt deep regret, and asked for a lighter sentence of one year and one day. His final sentence includes three years of supervised release and the forfeiture of $48.4 million. What is Celsius Celsius, based in Hoboken, New Jersey, was founded in 2017 and filed for bankruptcy in July 2022 after a rush of customer withdrawals when cryptocurrency prices collapsed. At one point, Celsius promised up to 17% interest on deposits but ended up with a $1.19 billion gap in its finances. Mashinsky, originally from Ukraine, moved to Israel with his family before later settling in New York. Along with the criminal charges, he is also facing civil lawsuits from the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Trade Commission, and New York Attorney General Letitia James. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Free Malaysia Today
09-05-2025
- Business
- Free Malaysia Today
Celsius founder Alex Mashinsky gets 12 years jail for crypto fraud
Ukraine-born Alex Mashinsky moved to New York after visiting the city in 1988. (Reuters pic) 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.
The Guardian
08-05-2025
- Business
- The Guardian
Alex Mashinsky of cryptocurrency firm Celsius Network sentenced to 12 years
Alex Mashinsky, the founder and former chief executive of bankruptcy cryptocurrency lender Celsius Network, was sentenced on Thursday 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's safety, and artificially inflated the value of Celsius's proprietary token Cel. They sought a prison term of at least 20 years, calling it 'just punishment' for Mashinsky's having victimized thousands of people and caused billions of dollars in losses, while drawing more than $48m of personal benefits. 'The case for tokenization and the use of digital assets is strong but it is not a license to deceive,' the the US attorney in Manhattan Jay Clayton 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 $48.4m forfeiture. Lawyers for Mashinsky were not immediately available for comment. Founded in 2017, Celsius, based in Hoboken, New Jersey, 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 $1.19bn balance sheet deficit when it sought bankruptcy protection. Mashinsky has also faced civil lawsuits by the US Securities and Exchange Commission, the US Commodity Futures Trading Commission, the US Federal Trade Commission and the New York attorney general Letitia James.
