Celsius Founder’s Defense Claims Statements Were Made in Good Faith
Celsius Scandal: Mashinsky on Trial for Crypto Fraud
Lawyers for Alex Mashinsky, founder of Celsius Network, have argued that the former CEO “did not intend to defraud or harm anyone.” Mashinsky’s weekly statements to Celsius customers, they claimed, were made in good faith as the company faced a financial crisis.
Celsius Network’s Collapse and SEC Allegations
Celsius was a major player in the crypto lending space until the crypto winter of 2022 led to a massive financial downfall. The company abruptly froze the accounts of 1.7 million users and filed for bankruptcy, blaming the extreme market conditions. However, the SEC alleges that false statements and market manipulation of Celsius’ native token, CEL, contributed to the collapse.
Mashinsky Faces 7 Criminal Charges in New York
Prosecutors have accused Mashinsky of wire fraud, securities fraud, and commodities fraud. He faces up to 115 years in prison if convicted. Meanwhile, former Celsius executive Roni Cohen-Pavon pleaded guilty to four charges and has agreed to cooperate with prosecutors.
Celsius Creditors Receive Payouts Amid Market Rally
Celsius creditors have been recovering as much as 85 cents on the dollar, partially benefiting from the recent crypto market recovery. However, many feel bittersweet, as legal fees have taken a large portion of the funds, and they missed out on recent crypto gains.
Celsius Reborn as Ionic Digital
After emerging from bankruptcy, Celsius has rebranded as Ionic Digital, focusing on Bitcoin mining. Creditors now hold shares in the new venture.
Who is Alex Mashinsky?
Alex Mashinsky was born in 1965 in the Soviet Union and later moved to Israel. After relocating to New York, he became an early pioneer of Voice over Internet Protocol (VoIP) and founded several successful tech companies. In 2017, he launched Celsius Network, a crypto lending platform promising high returns on deposits. However, his career has been marred by the scandal and collapse of Celsius, which now puts him at the center of a high-profile fraud trial.
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