Celsius Founder Alex Mashinsky To Plead Guilty To Fraud Charges

Highlights

Alex Mashinsky, founder of Celsius, plans to plead guilty to two fraud charges after being indicted in 2023.
Mashinsky allegedly misled customers and inflated Celsius's crypto token value, reaping $42 million.
Celsius filed for Chapter 11 bankruptcy in 2022 following a massive withdrawal rush.

Alex Mashinsky, the founder and former CEO of Celsius Network, has agreed to plead guilty to two fraud charges following an indictment filed in July 2023. His defense attorney announced this during a court hearing in a Manhattan federal court. The charges relate to allegations of fraud, conspiracy, and market manipulation concerning Celsius Network’s operations and its proprietary token, Cel.

This decision follows a legal battle that started earlier in 2023 when Mashinsky was initially charged with seven counts related to the collapse of Celsius.

Celsius Founder Alex Mashinsky Faces Guilty Plea for Fraud and Market Manipulation

In a recent development, Celsius Network founder Alex Mashinsky intends to plead guilty to two counts of fraud after being indicted in 2023. These charges stem from accusations that Mashinsky misled Celsius customers, prompting them to invest in the company’s crypto services under pretenses. Prosecutors claim that Mashinsky artificially inflated the value of the company’s proprietary token, Cel, to mislead investors and customers.

Moreover, Celsius founder is also accused of personally profiting from his actions. Federal prosecutors allege that he reaped approximately $42 million in proceeds from the sale of Cel tokens, further exacerbating the damage caused to investors.

Earlier this year, Celsius former chief revenue officer, Roni Cohen-Pavon, pleaded guilty to similar charges and agreed to cooperate with prosecutors’ ongoing investigation.

More so, in September 2024, Mashinsky sought the testimony of six former employees to support his defense in his ongoing fraud trial. Mashinsky blamed his team for misleading investors and misrepresenting the company’s financial condition.

Celsius Network’s Bankruptcy and the Fall

The criminal charges against Celsius founder come after the collapse of Celsius Network in 2022. The company filed for Chapter 11 bankruptcy protection in July 2022, following a rush of withdrawals by customers fearing insolvency. As a result, many customers were unable to access their funds. The bankruptcy was one of the first major events in a series of failures within the crypto lending sector during the 2022 market crash.

Similarly, this period also saw the collapse of other entities like FTX and Three Arrows Capital. However, in recent reports, after almost two years, the FTX reorganization plan is set to resume in January 2025. The plan will allow creditors to begin receiving payments, though users must create accounts with designated agents to be eligible.

The Celsius Network bankruptcy revealed financial mismanagement and fraud within the company, with customers accusing Mashinsky of misleading them. This financial instability ultimately led to the downfall and the legal charges against its former CEO.

Mashinsky’s legal team is continuing to navigate the fraud charges in preparation for his upcoming court appearances. Although he initially pleaded not guilty to the charges, Mashinsky has now agreed to plead guilty.

However, despite the Celsius founder guilty plea, at press time, CEL price remained relatively stable. The token, which has faced volatility since the collapse, has rallied by 17% over the past 24 hours. This recent uptick comes after a period of sharp declines, with CEL price dropping over 96% from its all-time high.

Recommended
Price Analysis

Best Crypto Presales To Invest In September 2025 – Top Upcoming Presale Tokens

Best Crypto AI Trading Bots In 2025

Top Meme Coins To Buy In September 2025

Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.