DOJ Seeks 20-Yr Sentence for Celsius Founder Alex Mashinsky

Policy, Celsius, Alex Mashinsky, US, Crime, Court Cases, News Federal prosecutors known as Mashinsky the architect of a “years-long campaign of lies and self-dealing” that left clients with billions in losses. 

Alex Mashinsky, the founder and former CEO of collapsed crypto lender Celsius Network, faces the prospect of spending the following 20 years behind bars if the U.S. Department of Justice’s sentencing memo request is granted.

In the memo filed late Monday, the DOJ urged the court docket to impose a 20-year jail sentence, calling the crimes a “deliberate, calculated” fraud that induced practically $7 billion in buyer losses and left hundreds financially devastated.

Mashinsky, who pleaded guilty in December to misrepresenting the protection of buyer deposits and manipulating Celsius’s CEL token, “refuses to accept responsibility” for his crimes and continues to shift blame to regulators, market situations and even his victims, prosecutors stated.

“Mashinsky’s crimes were not the product of negligence, naivete, or bad luck,” they wrote. “They were the result of deliberate, calculated decisions to lie, deceive, and steal in pursuit of personal fortune.”

At its peak in 2021, Celsius managed greater than $20 billion in buyer crypto belongings. Mashinsky aggressively marketed the platform as a protected various to banks, promising excessive yields and low danger.

Prosecutors stated these guarantees had been a sham: Celsius took uncollateralized loans, made dangerous trades and secretly used buyer belongings to control the value of its CEL token — all whereas publicly assuring clients their funds had been protected.

Mashinsky personally offered over $48 million worth of CEL at inflated prices, prosecutors stated, at the same time as he instructed clients he was “HODLing” alongside them. When Celsius collapsed into bankruptcy in July 2022, about $4.7 billion in customer funds were trapped.

Post-bankruptcy, clients had been left with a shortfall exceeding $1 billion. Adjusting for as we speak’s crypto costs post-2024’s “Trump-trade” rally, prosecutors estimate the overall loss is nearer to $7 billion.

Prosecutors warned that something lower than a major jail sentence would fail to mirror the gravity of Mashinsky’s conduct, undermine respect for the legislation, and ship the mistaken message to different crypto executives tempted to chase private enrichment on the expense of their clients.

Judge John G. Koeltl will sentence Mashinsky on May 8.

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