Founder of Cryptocurrency Lender 'Celsius Network' Pleads Guilty to Fraud (reuters.com) 13
59-year-old Alex Mashinsky, the founder/former CEO of cryptocurrency lender Celsius Network, "pleaded guilty on Tuesday to two counts of fraud," reports Reuters.
He'd been indicted in July on seven counts of fraud, conspiracy and market manipulation charges, according to the article, and federal prosecutors in Manhattan "said he misled customers of Celsius to persuade them to invest, and artificially inflated the value of his company's proprietary crypto token." On Tuesday, during a hearing before U.S. District Judge John Koeltl, Mashinsky said he pleaded guilty to two out of the seven counts he was initially charged with: commodities fraud, and a fraudulent scheme to manipulate the price of CEL, Celsius' in-house token. In court, Mashinsky admitted to giving Celsius customers "false comfort" by giving an interview in 2021 in which he said Celsius had received approval from regulators for its "Earn" program, which it had not. That program offered to deploy customers' cryptocurrency assets to yield investment returns. He said he also failed to disclose that he had been selling his holdings of CEL, the platform's in-house token.
"I know what I did was wrong, and I want to try to do whatever I can to make it right," Mashinsky said. As part of his plea deal with prosecutors, Mashinsky agreed not to appeal any sentence of 30 years or less — the maximum he faces for the two counts. Koeltl is set to sentence him on April 8, 2025.
Federal prosecutors in Manhattan have said Mashinsky also personally reaped approximately $42 million in proceeds from selling his holdings of the Cel token. "Mashinsky made tens of millions of dollars selling his own CEL at artificially high prices, while his customers were left holding the bag when the company went bankrupt," Damian Williams, the U.S. Attorney in Manhattan, said in a statement on Tuesday... Founded in 2017, Celsius filed for Chapter 11 bankruptcy protection in July 2022 after customers rushed to withdraw deposits as crypto prices fell. Many were initially unable to access their funds... Celsius' former chief revenue officer, Roni Cohen-Pavon, pleaded guilty in September 2023 and agreed to cooperate with prosecutors' investigation.
"The company exited bankruptcy on Jan. 31, and has pivoted to Bitcoin mining..."
He'd been indicted in July on seven counts of fraud, conspiracy and market manipulation charges, according to the article, and federal prosecutors in Manhattan "said he misled customers of Celsius to persuade them to invest, and artificially inflated the value of his company's proprietary crypto token." On Tuesday, during a hearing before U.S. District Judge John Koeltl, Mashinsky said he pleaded guilty to two out of the seven counts he was initially charged with: commodities fraud, and a fraudulent scheme to manipulate the price of CEL, Celsius' in-house token. In court, Mashinsky admitted to giving Celsius customers "false comfort" by giving an interview in 2021 in which he said Celsius had received approval from regulators for its "Earn" program, which it had not. That program offered to deploy customers' cryptocurrency assets to yield investment returns. He said he also failed to disclose that he had been selling his holdings of CEL, the platform's in-house token.
"I know what I did was wrong, and I want to try to do whatever I can to make it right," Mashinsky said. As part of his plea deal with prosecutors, Mashinsky agreed not to appeal any sentence of 30 years or less — the maximum he faces for the two counts. Koeltl is set to sentence him on April 8, 2025.
Federal prosecutors in Manhattan have said Mashinsky also personally reaped approximately $42 million in proceeds from selling his holdings of the Cel token. "Mashinsky made tens of millions of dollars selling his own CEL at artificially high prices, while his customers were left holding the bag when the company went bankrupt," Damian Williams, the U.S. Attorney in Manhattan, said in a statement on Tuesday... Founded in 2017, Celsius filed for Chapter 11 bankruptcy protection in July 2022 after customers rushed to withdraw deposits as crypto prices fell. Many were initially unable to access their funds... Celsius' former chief revenue officer, Roni Cohen-Pavon, pleaded guilty in September 2023 and agreed to cooperate with prosecutors' investigation.
"The company exited bankruptcy on Jan. 31, and has pivoted to Bitcoin mining..."
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How is that news? (Score:2)
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Sadly there are still people buying the stuff that haven't caught onto how it's been hijacked by bad actors almost from the start.
Holding unpegged crypto is a bad idea (Score:2, Insightful)
With very few exceptions* the same goes for fiat currencies.**
Buying crypto** and fiat currencies as-needed for immediate spending: OK
Buying them as a hedge for future spending: OK
Speculating on them knowing you might lose it all: Hey, its your money.
Investing in them as if they are a stable investment: Talk to be about a bridge in Arizona
The "few exceptions" for fiat currencies include anything you regularly need, such as your local legal-tender, and fiat currencies that are widely considered to be stabl
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With very few exceptions* the same goes for fiat currencies.**
Except that national currencies are used as currency. Crypto currencies aren't. Except a little bit for illegal transactions, cryptocoins are used to specuate.
You know what they say (Score:2)
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Stereotypes exist for a reason.
Exactly. because popular perceptions align with reality in all cases.
Mortage (Score:2)
It's as if Alice takes out a mortgage on her 5 bedroom house in a nice neighborhood, the bank sells the house for pennies on the dollar, deducts Alice's debt, and returns a tent to Alice. Then the bank issues statements that Alice and other customers have been made whole, and the court nods along.
I think this is how foreclosure works:
The bank seizes the mortgaged property, sells it at auction ("market price"), takes what they are owed, and turns the difference (less any fees) over to the original owner.
Of course, real foreclosures typically only happen if the owner is "underwater" and can't sell the house himself to pay off the mortgage. In that case, instead of the bank giving the owner a refund, it gives the owner a bill for the remaining (but now unsecured) debt.
As for "pennies on the dollar" fo