Latest news with #non-CEL
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.
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.
