Latest news with #CelsiusNetwork
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.
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 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.
Epoch Times
09-05-2025
- Business
- Epoch Times
Founder of Crypto Platform Celsius Sentenced to 12 Years in Jail for Fraud
The founder and former CEO of bankrupt cryptocurrency lender Celsius Network has been sentenced to 12 years in prison on fraud charges, the Department of Justice (DOJ) said on May 8. Alexander Mashinsky, 59, of New York, was sentenced by U.S. District Judge John G. Koeltl on May 8 after pleading guilty in December 2024 to commodities fraud and securities fraud. His sentence includes three years of supervised release and a $50,000 fine. Mashinsky was also ordered to forfeit $48.39 million, according to the DOJ's Prosecutors stated that Mashinsky had misled customers about Celsius's proprietary crypto token CEL and artificially inflated its value by buying it on the open market. This manipulation allowed him to profit about $48 million from his own sales of CEL. U.S. Attorney Jay Clayton said that Mashinsky targeted retail investors with promises that their investments were safe on Celsius, while in reality, he used those funds for risky bets. Mashinsky made tens of millions selling his own CEL tokens 'while his customers lost billions,' Clayton added. Related Stories 12/4/2024 7/14/2023 'America's investors deserve better,' Clayton said in a statement. 'The case for tokenization and the use of digital assets is strong, but it is not a license to deceive.' Lawyers for Mashinsky were not immediately available to comment. Celsius was a global cryptocurrency platform that offered investment returns for asset deposits, secured loans, and custody services. The company filed for Chapter 11 bankruptcy in July 2022. At the sentencing hearing, Assistant U.S. Attorney Allison Nichols cast Mashinsky as a financial predator, saying that he had deceived customers from the start by exaggerating Celsius's ability to build momentum. 'He preyed on hope,' Nichols told the judge, noting that the customers were not going to be made financially whole regardless of the money that could be recovered through bankruptcy proceedings. 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.' According to the DOJ statement, Mashinsky allegedly deceived customers about Celsius's financial position and secretly withdrew $8 million worth of his own non-CEL assets from the company before it collapsed. Hundreds of thousands of Celsius users were left without access to about $4.7 billion in digital assets when the company finally announced that it was halting customer withdrawals in June 2022. Cameron Crewes, who served on a victims' committee, has called for a 'harsh' sentence. Crewes said during the sentencing hearing that hundreds of victims have died before they could see justice served. The Associated Press contributed to this report.
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.'
