Latest news with #AlexanderMashinsky
Yahoo
09-05-2025
- Business
- Yahoo
Celsius CEO Alex Mashinsky sentenced to 12 years in crypto fraud case
Alexander Mashinsky, founder and former CEO of the failed cryptocurrency platform Celsius Network, was sentenced to 12 years in prison on Thursday after pleading guilty to federal fraud charges. A plea agreement had called for up to 30 years. Mashinsky acknowledged illegally manipulating the price of Celsius' proprietary token while secretly selling his own tokens at inflated prices. He made $48 million off the scheme before Celsius filed for bankruptcy in 2022. By that time, Celsius had become one of the largest crypto platforms in the world, with around $25 billion in assets. Customers considered the business a modern bank where they could safely deposit crypto assets and earn interest. But Mashinsky admitted to making statements that gave them false comfort, including suggesting the business had been approved by regulators. Prosecutors said Mashinsky used slogans like 'Unbank Yourself' to persuade customers to invest — then used their deposits to pay for market purchases of the Celsius token to prop up its value. "I accept full responsibility for my actions," Mashinsky told the court in December as he pleaded guilty to two of the seven counts he was charged with. His downfall mirrors that of FTX's Sam Bankman-Fried, who was convicted of stealing around $8 billion from customers and sentenced to 25 years in prison. Other crypto bosses who have been in trouble since the industry's 2022 collapse include Binance's Changpeng Zhao, who was sentenced last year to four months in prison after pleading guilty to charges of enabling money laundering. In January, Do Kwon of Terraform Labs pleaded not guilty to fraud charges. Prosecutors say he was involved in a scheme to deceive investors in order to fraudulently inflate the value of Terraform's stablecoin. Senate Democrats on Thursday stopped a Trump-backed bill to regulate stablecoins, saying it needed stronger provisions for anti-money laundering, foreign issuers and national security. They also worried it could further enrich Trump, who is affiliated with a stablecoin business that could generate tens of millions of dollars a year in revenue for his family and their business partners.
eNCA
09-05-2025
- Business
- eNCA
Former head of crypto platform Celsius sentenced 12 years
NEW YORK - The founder and former CEO of bankrupt cryptocurrency trading platform Celsius, Alexander Mashinsky, was sentenced Thursday to 12 years in prison on fraud charges. Mashinsky pleaded guilty last December to securities fraud in a deal that reduced the level of charges he faced. The sentence comes down nearly three years after the startup's collapse as a cryptocurrency platform, which offered customers the ability to invest in digital currencies, including its own coin, CEL. According to the indictment, Celsius executives took more than $4 billion in customers' assets to finance the platform's operations, make unsecured loans and invest in high-risk items. Mashinsky was also accused of manipulating the price of CEL by using customers' funds to purchase the currency, artificially inflating its price. At its peak in late 2021, Celsius had more than one million clients and held more than $25 billion in assets. But the company hit hard times in the spring of 2022 as the value of cryptocurrencies plummeted. Facing deep customer withdrawals, Celsius on June 12, 2022 froze over $4.7 billion in customer accounts before filing for bankruptcy protection a month later. A progress report published in March found that 93 percent of the frozen assets had been recovered and returned to former Celsius customers. The 2022 cryptocurrency collapse affected a number of other startups in the field, including FTX, the second-largest crypto exchange that filed for bankruptcy in November 2022.
Finextra
09-05-2025
- Business
- Finextra
Ex-Celsius CEO Mashinsky gets 12-year sentence for crypto fraud
Alexander Mashinsky, the former CEO of crypto firm Celsius Network, has been sentenced to 12 years in prison for commodities fraud and securities fraud. 0 Mashinsky pled guilty in December over his part in a scheme to defraud investors. Celsius operated a crypto asset platform offering customers 'rewards' on deposited assets, secured loans, and custody services. Marketing itself as the 'safest place for your crypto,' the firm encouraged customers to 'unbank' themselves by transferring crypto assets to its platform. By late 2021, Celsius had become one of the largest crypto platforms in the world, holding approximately $25 billion in assets at its peak. However, persecutors say that Mashinsky orchestrated a years-long scheme to mislead customers about Celsius's proprietary crypto token CEL, manipulating its price by spending hundreds of millions purchasing it on the open market to artificially inflate its value. Sometimes, they did this using customer funds without disclosing the fact. While publicly claiming he was not selling CEL, he was doing just that, profiting to the tune of approximately $48 million. In June 2022, Celsius announced it was halting customer withdrawals, leaving hundreds of thousands of customers unable to access $4.7 billion on the platform. The firm filed for bankruptcy the following month. US Attorney Jay Clayton says: 'Alexander Mashinsky targeted retail investors with promises that he would keep their 'digital assets' safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets. In the end, Mashinsky made tens of millions of dollars while his customers lost billions." Mashinsky joins fellow crypto bosses FTX founder Sam Bankman-Fried, Binance's Changpeng Zhao and Do Kwon of Terraform Labs in receiving prison time.
Yahoo
09-05-2025
- Business
- Yahoo
Celsius CEO sentenced to 12 Years for fraud, market manipulation
May 9 (UPI) -- Alexander Mashinsky, the founder and former CEO of the Celsius cryptocurrency platform and Bitcoin mining company, was sentenced to 12 years in prison on counts related to commodities and securities fraud. The U.S. Attorney for the Southern District of New York Jay Clayton announced the sentence for Mashinsky in a press release Thursday. "Mashinsky targeted retail investors with promises that he would keep their 'digital assets' safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets," Clayton said. Mashinsky managed to make tens of millions of dollars "while his customers lost billions." Via his Celsius crypto asset platform, Mashinsky offered customers "rewards" on deposited assets, secured loans, and custody services and persuaded customers to "unbank" themselves by transferring their crypto assets to his platform. Celsius' primary "Earn" offering promised to employ customer assets to generate investment returns. Celsius also offered "Custody" and "Borrow" programs, the latter of which allowed customers to get loans by posting their crypto assets as collateral. Mashinsky marketed Celsius to retail customers globally and frequently misrepresented key aspects of Celsius' business and finances in order to attract customers and then retain their assets. His false claims covered the yield-generating activities of Celsius, and its profitability, the sustainability of high reward rates and the risks connected with depositing crypto assets on the platform. As Mashinsky portrayed Celsius as secure, the platform grew exponentially, and by autumn of 2021, Celsius had become one of the biggest crypto platforms in the world, holding as much as $25 billion in assets at one point. Mashinsky worked with others to orchestrate a scheme to mislead clients about Celsius' proprietary crypto token CEL. They manipulated CEL's price by spending hundreds of millions to buy it on the open market in order to artificially inflate its value, occasionally even with customer deposits with the customers' knowledge. Mashinsky then frequently made false public statements about Celsius' market activity and its role in supporting and inflating CEL's. At some points, Mashinsky and other executives personally bought CEL to falsely support its value. The artificial price inflation allowed Mashinsky to make around $48 million in profits from his own sales of CEL Mashinsky kept on assuring customers of Celsius' strong financial position and liquidity but withdrew $8 million of his own non-CEL assets from Celsius. When Celsius announced it was halting customer withdrawals in June of 2022, hundreds of thousands of Celsius customers had $4.7 billion in unavailable assets on the platform. Celsius then filed for bankruptcy in July of 2022. Mashinsky had previously pleaded guilty in December of 2024. He's also been sentenced to three years of supervised release, to pay a fine of $50,000 and forfeit more than $48 million.
CNN
09-05-2025
- Business
- CNN
Founder of crypto lender Celsius sentenced to 12 years in prison
The founder and former CEO of the cryptocurrency lending platform Celsius Network has been sentenced to 12 years in prison after a prosecutor labeled him a predator who 'preyed on hope' by enticing vulnerable customers to risk their life savings for a supposedly safe investment. Alexander Mashinsky, 59, was sentenced Thursday by US District Judge John G. Koeltl, who said a substantial term in prison was necessary for someone who engaged in 'extremely serious' crimes that enabled him to pocket over $45 million while some of his customers lost everything and suffered severe psychological harm. Celsius declared bankruptcy in 2022, exposing risky financial bets Mashinsky had made with some of the $20 billion that thousands of customers poured into the company. He had promised that their money would be safe and secure at Celsius, which pitched itself as a modern-day bank where crypto assets could earn interest. The defense blamed the collapse of Celsius on a 'cataclysmic downturn' of cryptocurrency markets in May and June of 2022 and said in court papers that Mashinsky's 'actions were never predatory, exploitative or venal. He never acted with the intent to hurt anyone.' But Assistant US Attorney Allison Nichols cast him as a financial predator, telling the judge Thursday that Mashinsky had deceived customers from the start by exaggerating Celsius' ability to build momentum. 'He preyed on hope,' she said. 'Mashinsky knew exactly what he was doing — selling these people hope.' She said the customers were not going to be made financially whole regardless of money that can be recovered through bankruptcy proceedings. Before he was sentenced, Mashinsky sobbed several times as he apologized to customers and referenced his difficult past as his family was able to leave a small Ukrainian town in the former Soviet Union with help from the United States when he was 7. The family moved to Israel, where Mashinsky served three years in the Israeli Defense Forces as a fighter pilot before coming to America. Mashinsky said he 'never meant to hurt anybody here after all this country has done for me.' 'I'm truly sorry,' he said, describing himself as someone 'who came from nothing.' When he pleaded guilty in December, Mashinsky admitted to misleading customers between 2018 and 2022 by promising their investments were safe even as he fabricated Celsius' profitability and put customers' funds at the mercy of uncollateralized loans and undisclosed risky market bets. His attorney, Marc Mukasey, said victim impact statements submitted to the court were 'rather brutal' toward his client. 'We hear the intensity of their pain,' he said. 'Our sympathies are with everyone.' Several victims spoke at the sentencing hearing. Cameron Crewes, who serves on a victims' committee, called for a 'harsh sentence,' saying nearly 250 victims died before they could see justice served or get adequately compensated for losses. 'Many people have been wiped out,' he said. In a statement, US Attorney Jay Clayton said Mashinsky 'made tens of millions of dollars while his customers lost billions.' He added: 'America's investors deserve better. The case for tokenization and the use of digital assets is strong, but it is not a license to deceive. The rules against fraud still apply.'
