Ex-Celsius CEO Alex Mashinsky Pleads Guilty to Fraud in Landmark Crypto Case
Alex Mashinsky, the founder and former CEO of the now-defunct cryptocurrency lender Celsius Network, has pleaded guilty to two federal fraud charges in a high-profile case that has rocked the crypto industry. Facing a maximum sentence of 30 years, Mashinsky admitted to commodities fraud and a scheme to manipulate the price of Celsius’s native token, CEL.
During a hearing in Manhattan’s U.S. District Court, Mashinsky, 59, acknowledged misleading customers about Celsius’s regulatory compliance and financial health. Specifically, he falsely claimed that the platform’s “Earn” program had regulatory approval and concealed his own sales of CEL tokens while publicly asserting otherwise.
“I know what I did was wrong, and I accept full responsibility for my actions,” Mashinsky told the court. His sentencing is scheduled for April 8, 2025.
Founded in 2017, Celsius Network promised retail customers high returns on their crypto assets, while extending loans to institutional clients. At its peak, the company managed over $25 billion in assets. However, the platform filed for Chapter 11 bankruptcy in July 2022, citing “extreme market conditions” in the wake of the Terra/LUNA collapse. This marked the beginning of a broader crypto downturn that also claimed firms like FTX and Voyager Digital.
Celsius’s financial woes were compounded by management’s risky practices, including uncollateralized loans and market manipulation. Prosecutors alleged that Mashinsky personally profited $42 million by artificially inflating CEL’s value, leaving customers to shoulder massive losses when the firm went under.
Mashinsky originally faced seven charges, including securities fraud and wire fraud. He initially pleaded not guilty and sought to have certain charges dismissed, but a judge ruled the arguments “without merit.” The plea deal allowed Mashinsky to avoid a lengthy trial and reduced the charges to two counts, though he faces significant prison time.
His co-defendant, Roni Cohen-Pavon, Celsius’s former chief revenue officer, previously pleaded guilty to four felony counts in September 2023 and is awaiting sentencing.
Mashinsky’s case joins a string of legal actions against crypto executives, including Sam Bankman-Fried of FTX and Changpeng Zhao of Binance, highlighting increasing scrutiny on the sector. U.S. Attorney Damian Williams described Mashinsky’s actions as a betrayal of trust: “He made tens of millions while leaving his customers to bear the brunt of Celsius’s collapse.”
As part of Celsius’s bankruptcy resolution, the firm has pivoted to Bitcoin mining, but its reputation remains tarnished. Mashinsky’s guilty plea underscores growing enforcement against crypto misconduct and signals a turning point in holding industry leaders accountable.
With sentencing set for April 2025, the case may serve as a cautionary tale for crypto entrepreneurs operating in the still-maturing and heavily scrutinized digital asset space.
