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[NEWS] Founder of failed cryptocurrency lending service Celsius pleads guilty to fraud in plea deal

2024/12/04 17:47 (Updated 2025/02/12 15:10)
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[NEWS] Founder of failed cryptocurrency lending service Celsius pleads guilty to fraud in plea deal

Pleads guilty to price manipulation and other fraud

Alex Mashinsky, founder and former CEO of Celsius Network, a cryptocurrency lending service that collapsed in 2022, pleaded guilty to some of the charges on the 3rd.

Mashinsky was indicted on seven charges, and admitted to two of them through a plea bargain. These two charges could carry a maximum sentence of 30 years in prison.

Mashinsky admitted to two counts: product fraud and price manipulation of CEL, the token issued by the company. In particular, regarding the product fraud, he falsely explained the Celsius Earn program, and made investors sell Bitcoin (BTC), unfairly earning a profit of $42 million (approximately 6.3 billion yen). He also admitted that his explanation that Celsius was approved by regulatory authorities and his statement that he had not sold CEL were false.

Mashinsky apologised when he pleaded guilty to two counts of fraud, saying: "What I did was wrong and I will do whatever it takes to make it right."

He is due to be sentenced on April 8 next year.

Cryptocurrency-related companies convicted

Celsius filed for Chapter 11 bankruptcy in July 2022 and went bankrupt. The company was in a difficult financial situation due to the impact of the Terraluna incident that occurred in the same year.

Mashinsky was arrested and sued the following year, but he consistently maintained his innocence.

In the United States, founders of cryptocurrency-related companies have been convicted one after another.

Sam Bankman-Fried, former CEO of FTX, a major cryptocurrency exchange that collapsed in 2022, was sentenced to 25 years in prison and fined $11 billion (approximately 1.65 trillion yen) for fraud and other charges.

In addition, CZ (Changpeng Zhao), founder and former CEO of major cryptocurrency exchange Binance, was sentenced to four months in prison in June this year for violating anti-money laundering measures and other offenses, and served his sentence.

Reference: Reuters
Image: Shutterstock

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Iolite Vol.14

July 2025 issueReleased on 2025/05/30
Interview Iolite FACE vol.14 Charles Hoskinson, founder and CEO of Cardano/Input Output Global PHOTO & INTERVIEW Mariko Mabuchi Special feature: "Considerations on cryptocurrency-related policies in Japan and the US", "Blockchain guide from Japan", "Huge position liquidation occurs at Hyperliquid! A new, unanticipated crisis in decentralized finance", "Sakana AI, a generative AI startup from Japan that is attracting a lot of attention", "Prepare for a recession: correlation between finance and anomalies" Crypto Journey: "Web 3.0 from the perspective of the 'King of Debate'" Interview with Hiroyuki Special series: Virtual Nishi: "Cryptocurrency market trends and key points for interpreting them" Series: Tech and Future Toshinao Sasaki, etc.