NEW YORK (AP) 鈥� The founder and former CEO of the failed cryptocurrency lending platform could face decades in prison after pleading guilty Tuesday to federal fraud charges, admitting that he misled customers about the business.
, 58, of Manhattan, entered the plea in New York federal court to commodities and securities fraud.
He admitted illegally manipulating the price of Celsius鈥檚 proprietary crypto token while secretly selling his own tokens at inflated prices to pocket about $48 million before Celsius collapsed into bankruptcy in 2022.
In court, he admitted that in 2021 he publicly suggested there was regulatory consent for the company's moves because he knew that customers 鈥渨ould find false comfort鈥� with that.
And he said that in 2019, he was selling the crypto tokens even though he told the public that he was not. He said he knew customers would draw false comfort from that too.
鈥淚 accept full responsibility for my actions,鈥� Mashinsky said of crimes that stretched from 2018 to 2022 as the company pitched itself to customers as a modern-day bank where they could safely deposit crypto assets and earn interest.
U.S. Attorney Damian Williams said in a release that Mashinsky 鈥渙rchestrated one of the biggest frauds in the crypto industry鈥� as his company's assets purportedly grew to about $25 billion at its peak, making it one of the largest crypto platforms in the world.
He said Mashinsky used catchy slogans like 鈥淯nbank Yourself鈥� to entice prospective customers with a pledge that their money would be as safe in crypto accounts as money would be in a bank. Meanwhile, prosecutors said, Mashinsky and co-conspirators used customer deposits to fund market purchases of the Celsius token to prop up its value.
Machinsky made tens of millions of dollars selling his own CEL tokens at artificially high prices, leaving his customers 鈥渉olding the bag when the company went bankrupt,鈥� Williams said.
An indictment alleged that Mashinsky promoted Celsius through media interviews, his social media accounts and Celsius鈥� website, along with a weekly 鈥淎sk Mashinsky Anything鈥� session broadcast that was posted to Celsius鈥� website and a YouTube channel.
Celsius employees from multiple departments who noticed false and misleading statements in the sessions warned Mashinsky, but they were ignored, the indictment said.
A plea agreement Mashinsky made with prosecutors calls for him to be sentenced to up to 30 years in prison and to forfeit over $48 million, which is the amount of money he allegedly made by selling his company's token.
Sentencing was scheduled for April 8.
Larry Neumeister, The Associated Press
