Celsius Founder Alex Mashinsky Reportedly Set to Plead Guilty in Fraud Case

Alex Mashinsky, the founder and former CEO of Celsius Network, is expected to plead guilty to fraud charges tied to the collapse of his cryptocurrency lending platform during the 2022 market downturn. This revelation, shared by his defense attorney in a recent hearing, marks a significant shift from his previous stance of innocence.

Mashinsky was initially indicted on seven charges in July 2023, including fraud, conspiracy, and market manipulation. While he initially denied all allegations, his decision to change his plea follows a November ruling by US District Judge John Koeltl, who denied Mashinsky's motion to dismiss two key criminal charges. His trial had been scheduled for January 2025.

Founded in 2017, Celsius Network once promised high-yield returns to crypto investors but filed for Chapter 11 bankruptcy in July 2022 amidst a sharp decline in the cryptocurrency market. The platform’s collapse prompted a wave of customer withdrawals, leaving thousands of investors in financial limbo.

Federal prosecutors allege that Mashinsky and Roni Cohen-Pavon, Celsius’s former chief revenue officer, manipulated the market value of Celsius's native Cel token. Mashinsky is accused of personally profiting $42 million from the sale of his holdings. Cohen-Pavon, meanwhile, pleaded guilty in September 2023 and is cooperating with authorities.

Despite its turbulent history, Celsius has continued operations, pivoting toward Bitcoin mining after emerging from bankruptcy earlier this year. On January 31, 2024, the company completed its initial bankruptcy payout, returning 57.7% of eligible claims to creditors. Its second payout, currently underway, increases the recovery rate to 60.4%.

This case underscores the ongoing scrutiny of crypto platforms by U.S. regulators, as they seek accountability for the sector’s most high-profile collapses.