Alexander Mashinsky, the founder of Celsius Network, was handed a sentence of 12 years in prison on Thursday for his role in deceiving customers and misappropriating millions of dollars through a cryptocurrency lending program.
collapsed in 2022
US District Judge John G. Koeltl characterized the offenses as “highly grave,” pointing out that Mashinsky, who is 59 years old, personally profited by more than $45 million. This occurred as numerous clients faced severe financial and emotional setbacks following the collapse of the cryptocurrency platform.
AP
Mashinsky “generated tens of millions of dollars for himself while his clients suffered losses totaling billions,” according to US Attorney Jay Clayton.
Once presented as a secure haven for individuals looking to generate interest from cryptocurrency holdings, Celsius declared bankruptcy following revelations of high-risk financial activities tied to approximately $20 billion in client funds. Prosecutors contended that Mashinsky intentionally deceived clients regarding the security of their investments while overstating the firm’s robustness and earnings potential. Prosecutor Allison Nichols asserted that Mashinsky “exploited aspirations,” enticing financially distressed investors with assurances he was aware couldn’t be fulfilled. In December, Mashinsky admitted guilt to charges including one count each of securities fraud and commodities fraud.
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At the sentencing hearing in New York, Mashinsky’s lawyers blamed the firm’s collapse on the severe decline in cryptocurrency markets during 2022, asserting that their client did not act out of malice or intend to cause damage. Statements from those harmed highlighted substantial difficulties they faced, and a spokesperson for a victim group mentioned that almost 250 individuals passed away without receiving any form of restitution or resolution. As he expressed his apologies to clients, Mashinsky broke down into tears multiple times. (This content was generated using AI assistance.)
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The article was initially published on:
Crypto Boss ‘Amassed Fortunes as Clients Suffered Major Losses’