News Scrap

Key Takeaways

Alex Mashinsky will plead guilty to two counts of fraud related to the Celsius bankruptcy.
Celsius Network has shifted its focus to Bitcoin mining after exiting bankruptcy protection.

Alex Mashinsky, the founder and former CEO of Celsius Network, plans to plead guilty to two counts of fraud, his defense attorney revealed during a hearing on Tuesday, according to a Reuters report.

This development comes more than a year after Mashinsky was indicted on seven charges, including fraud, conspiracy, and market manipulation, in July 2023. He initially pleaded not guilty to all charges at the time.

Mashinsky’s decision to change his plea follows US District Judge John Koeltl’s November ruling denying his motion to dismiss two criminal counts ahead of his trial, which was scheduled for January 2025.

Celsius Network, founded in 2017, filed for Chapter 11 bankruptcy protection in July 2022 amid a broader crypto market downturn that triggered a rush of customer withdrawals.

The company exited bankruptcy on January 31 and has since shifted its focus to Bitcoin mining.

Federal prosecutors accused Mashinsky and former chief revenue officer Roni Cohen-Pavon of manipulating the market for the company’s Cel token.

Cohen-Pavon pleaded guilty in September 2023 and agreed to cooperate with prosecutors.

According to prosecutors, Mashinsky personally gained approximately $42 million from selling his Cel token holdings.

The company is currently distributing $127 million to eligible creditors in its second bankruptcy payout, bringing the total recovery rate to 60.4% of eligible claims.

This follows January 2024’s initial distribution, which delivered approximately 57.7% of eligible claims in liquid crypto assets or cash.