A 12-year prison sentence was handed down to "Alex Mashinsky", the founder and former CEO of "Celsius", after he pleaded guilty last December to orchestrating a wide-ranging fraudulent scheme that involved misleading investors and manipulating the market value of the company's cryptocurrency "CEL".
The Southern District of the U.S. Attorney's Office in New York announced the ruling on May 8, where "Mashinsky" was convicted of committing fraud related to commodities and securities.
The ruling was issued by U.S. District Judge, "John G. Koeltl", in federal court in Manhattan, confirming the defendant's involvement in presenting a false picture of his company's financial stability and making promises of unattainable returns.
The prosecution clarified that "Mashinsky" exploited the trust of individual investors, claiming that their digital assets would be safer than those provided by banks, while he used these assets in risky ventures for personal gain.
The court acknowledged his involvement in artificially inflating the value of the CEL cryptocurrency and then secretly selling a significant portion of his holdings, allowing him to net approximately $48 million in profits.
Despite the prosecution's request for a sentence of up to 20 years, a 12-year prison sentence was imposed after "Mashinsky" agreed to waive any right to appeal within the scope of the ruling, as part of a plea deal.
Legal proceedings began in 2023 when "Mashinsky" was arrested on charges including securities and commodities fraud, as well as electronic fraud.
This coincided with "Celsius" agreeing to a $4.7 billion settlement with the Federal Trade Commission, conditional on the return of customer assets.
The cooperation of one of the company's former senior officials, "Roni Cohen-Pavon", who also pleaded guilty to the scheme, led to crucial insights that supported the case.
This ruling represents a critical juncture in one of the most prominent criminal cases in the digital finance sector, highlighting the violations committed within a company that was considered one of the key players in the cryptocurrency lending space.