Former Celsius Network CEO Alex Mashinsky was sentenced to 12 years in federal prison on Thursday.
The decision follows his December guilty plea to organizing a fraudulent scheme that misled investors and manipulated the market value of Celsius’s native token, CEL.
Sentencing Details
The U.S. Attorney’s Office, Southern District of New York, announced Mashinsky’s prison term on May 8.
“The founder and former Chief Executive Officer of Celsius Network LLC and their affiliated entities was sentenced to 12 years for committing commodities fraud and securities fraud at Celsius,” read the press release.
U.S. District Judge John G. Koeltl delivered the verdict in courtroom 14A of Manhattan’s Southern District courthouse. It comes nearly five months after the former crypto executive’s guilty plea, in which he admitted to exaggerating Celsius’s financial stability and promising investors unsustainable returns.
“Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank,” stated U.S. Attorney Jay Clayton. “In fact, he used those assets to place risky bets and to line his own pockets.”
During the court session, Mashinsky acknowledged his role in artificially boosting the price of CEL tokens while quietly selling tens of millions of dollars’ worth of his holdings. The accused also agreed to forfeit the proceeds from his illegal activities.
Prosecutors had pushed for a 20-year sentence, arguing that the ex-CEO remained “unrepentant” and emphasizing the widespread damage to the crypto lender’s customers. Federal authorities also said that Mashinsky made a profit of $48 million from the scheme.
Ultimately, the 59-year-old accepted sentencing guidelines of up to 30 years and waived his right to appeal any prison term within that range as part of his plea deal.
Multi-Billion Dollar Fraud Case
Mashinsky’s legal troubles began in 2023 when he was apprehended on charges of securities, commodities, and wire fraud. His arrest coincided with Celsius’s agreement to a $4.7 billion settlement with the Federal Trade Commission (FTC), one of the largest in the agency’s history. However, the deal is still contingent on the firm returning customer assets.
In September 2023, former Celsius chief revenue officer Roni Cohen-Pavon admitted guilt in the same case and agreed to cooperate with authorities. This provided key insights into the company’s inner operations.
His testimony contributed to the broader case brought against Celsius and Mashinsky by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for the multi-billion-dollar fraud scheme.
Although the former executive initially denied the accusations, his guilty plea and Thursday’s sentencing conclude a case that exposed serious misconduct at one of the most high-profile crypto lending firms.
The post Ex-Celsius CEO Alex Mashinsky Sentenced to 12 Years in Prison for Fraud appeared first on CryptoPotato.
Prosecutors had sought 20 years, citing Mashinsky’s $48M personal profits and unrepentant attitude toward defrauding retail investors. AA News, Crypto News, Alex Mashinsky, Celsius
This articles is written by : Nermeen Nabil Khear Abdelmalak
All rights reserved to : USAGOLDMIES . www.usagoldmines.com
You can Enjoy surfing our website categories and read more content in many fields you may like .
Why USAGoldMines ?
USAGoldMines is a comprehensive website offering the latest in financial, crypto, and technical news. With specialized sections for each category, it provides readers with up-to-date market insights, investment trends, and technological advancements, making it a valuable resource for investors and enthusiasts in the fast-paced financial world.