Alex Mashinsky, the former CEO of cryptocurrency lender Celsius, has pleaded guilty to one count of commodities fraud and one count of securities fraud.

Together, these charges carry a maximum prison sentence of 30 years.

Mashinsky’s Guilty Plea

Mashinsky was initially indicted in July 2023 on seven charges, including fraud, conspiracy, and market manipulation related to Celsius’ token, CEL.

During a Tuesday hearing before U.S. District Judge John Koeltl, he admitted to making false claims about Celsius’s “Earn” program. The program misled investors into transferring their Bitcoin to the platform, earning him an estimated $48 million in profit.

“I said that Celsius had approval from regulators,” said Mashinsky, according to an Inner City Press report. “It was false. I falsely said I was not selling my CEL tokens. I accept full responsibility for my actions.”

According to court documents, the former executive has agreed to forfeit the proceeds from his illegal schemes. Judge Koeltl is scheduled to sentence him on April 8, 2025.

Federal prosecutors have accused the 59-year-old of luring retail investors into Celsius by promising high returns while secretly manipulating the market to inflate the price of the companys native CEL token.

U.S. Attorney Damian Williams described his actions as “one of the biggest frauds in the crypto industry,” highlighting how he exploited catchy slogans like “Unbank Yourself” to attract billions in investments.

Fraudulent Practices Behind Celsius’ Collapse

Celsius, a crypto lending platform, offered services like earning rewards on crypto deposits, taking loans secured by crypto, and custodying assets. The primary offering was the “Earn” program, which promised high returns by investing users’ crypto. Under Mashinsky, the firm misrepresented its offerings safety, profitability, and sustainability to attract retail customers.

The 59-year-old and other executives manipulated the market to inflate the value of CEL. Court documents show that he and former chief revenue officer Roni Cohen-Pavon spent millions of dollars using customer deposits to support CEL’s price artificially, misleading investors about its true value.

Mashinsky personally profited by selling $48 million worth of CEL at inflated prices while falsely claiming he wasn’t selling. Before the platform halted withdrawals on June 12, 2022, he had withdrawn $8 million worth of crypto assets. The pause left customers unable to access $4.7 billion in crypto, and by July 13, 2022, the company filed for Chapter 11 bankruptcy.

The former CEO’s guilty plea follows that of Roni Cohen-Pavon, who also admitted guilt in September 2023. Cohen-Pavon admitted to four charges, including involvement in inflating the price of CEL. He agreed to cooperate with officials in their investigations and is scheduled for sentencing on December 11.