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Alexander Mashinsky, 58, of Manhattan, entered the plea in New
York federal court to commodities and securities fraud.
He admitted illegally manipulating the price of Celsius’s
proprietary crypto token while secretly selling his own tokens
at inflated prices to pocket about $48 million before Celsius
collapsed into bankruptcy in 2022.
In court, he admitted that in 2021 he publicly suggested there
was regulatory consent for the company's moves because he knew
that customers “would find false comfort” with that.
And he said that in 2019, he was selling the crypto tokens even
though he told the public that he was not. He said he knew
customers would draw false comfort from that too.
“I accept full responsibility for my actions,” Mashinsky said of
crimes that stretched from 2018 to 2022 as the company pitched
itself to customers as a modern-day bank where they could safely
deposit crypto assets and earn interest.
U.S. Attorney Damian Williams said in a release that Mashinsky
“orchestrated one of the biggest frauds in the crypto industry”
as his company's assets purportedly grew to about $25 billion at
its peak, making it one of the largest crypto platforms in the
world.
He said Mashinsky used catchy slogans like “Unbank Yourself” to
entice prospective customers with a pledge that their money
would be as safe in crypto accounts as money would be in a bank.
Meanwhile, prosecutors said, Mashinsky and co-conspirators used
customer deposits to fund market purchases of the Celsius token
to prop up its value.
Machinsky made tens of millions of dollars selling his own CEL
tokens at artificially high prices, leaving his customers
“holding the bag when the company went bankrupt,” Williams said.
An indictment alleged that Mashinsky promoted Celsius through
media interviews, his social media accounts and Celsius’
website, along with a weekly “Ask Mashinsky Anything” session
broadcast that was posted to Celsius’ website and a YouTube
channel.
Celsius employees from multiple departments who noticed false
and misleading statements in the sessions warned Mashinsky, but
they were ignored, the indictment said.
A plea agreement Mashinsky made with prosecutors calls for him
to be sentenced to up to 30 years in prison and to forfeit over
$48 million, which is the amount of money he allegedly made by
selling his company's token.
Sentencing was scheduled for April 8.
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