C Network founder pleads guilty to fraud over crypto lending platform’s collapse
Founder and former CEO of failed crypto lending platform Degree Celsius network could face decades in prison after pleading guilty Tuesday to federal fraud charges, admitting that he misled customers about his business practices.
Alexander Mashinsky58, of Manhattan, entered a plea in New York federal court to securities and commodities fraud charges.
He admitted to illegally manipulating the price of C’s proprietary cryptocurrency tokens while secretly selling his own tokens at inflated prices to pocket approximately $48 million previously. Celsius collapses in 2022.
In court, he admitted that in 2021 he publicly sought regulatory approval for the company’s moves because he knew customers “would find false comfort” with the provision. there.
And he said that in 2019 he sold cryptocurrency tokens even though he told the public that was not the case. He said he knew customers would get false comfort from that, too.
“I accept full responsibility for my actions,” Mashinsky said of the crimes spanning from 2018 to 2022 when the company advertised itself to customers as a modern bank where they could Deposit crypto assets securely and earn interest.
U.S. Attorney Damian Williams said in a statement that Mashinsky “orchestrated one of the largest frauds in the cryptocurrency industry” as his company’s assets allegedly grew to about 25 million. billion USD at its peak, making it one of the largest cryptocurrency platforms in the world.
He said Mashinsky used catchy slogans like “Unbank Yourself” to entice potential customers with the promise that their money would be as safe in a cryptocurrency account as it would be in a bank. Meanwhile, prosecutors said, Mashinsky and his co-conspirators used customer deposits to fund market purchases of Celcius tokens to increase its value.
Machinsky made tens of millions of dollars selling his own CEL tokens at artificially high prices, leaving his customers “holding the bag when the company went bankrupt,” Williams said.
An indictment alleges that Mashinsky promoted C through media interviews, his social media accounts and C’s website, along with the weekly broadcast “Ask Mashinsky Anything” was posted to C’s website and a website. YouTube channel.
C employees from multiple departments who noticed false and misleading statements during the sessions warned Mashinsky, but they were ignored, the indictment said.
A plea deal Mashinsky struck with prosecutors calls for him to be sentenced to up to 30 years in prison and forfeit more than $48 million, which is the amount of money he allegedly earned by Sell your company’s tokens.
Sentencing has been scheduled for April 8.
