Celsius Founder Mashinsky Faces Century-Long Sentence, Seeks Ex-Employee to Take the Fall and Overturn Conviction
Former Celsius CEO Alex Mashinsky is facing a potential sentence of over 100 years, and in an effort to reduce his sentence, he has requested six former employees, including the former CFO and CRO of Celsius, to testify in court.
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Alex Mashinsky: No Intent to Harm Anyone
The lending platform Celsius initially declared bankruptcy in 2022, and founder Alex Mashinsky was arrested in 2023 on suspicion of defrauding users and misleading investors about the financial condition of Celsius. His lawyers emphasized in a memo submitted to the New York district court that Mashinsky had no intent to harm anyone.
The legal team stated:
As the CEO of Celsius, Mashinsky relied on information provided by his experienced team and was unaware of internal operational issues within the company.
The U.S. Federal Trade Commission (FTC) fines bankrupt company Celsius Network $4.7 billion, former CEO arrested
Information Tampering, Alex Mashinsky Unaware
Mashinsky's defense also includes the weekly AMAs held.
The legal team claimed that the main purpose of the AMAs was to update Celsius users on the company's latest developments, and Celsius' risk management team would edit the content of the AMAs before release without informing Mashinsky.
Following this process, Mashinsky fully trusted the team's operations, and when he eventually learned of inaccuracies in the platform's financial information, he accepted the team's editing corrections, indicating that he had no fraudulent motives.
Key Witness Pleads Guilty
Alex Mashinsky requested six witnesses, including former Chief Revenue Officer of Celsius, Roni Cohen-Pavon, who pleaded guilty to related criminal charges last year.
This was in response to allegations of manipulating and hyping the platform's token CEL. Prosecutors claimed that Mashinsky and Roni Cohen-Pavon conspired to manipulate the price of CEL tokens by buying in large quantities to boost the price and then dumping them.
The legal team emphasized that these actions were not disclosed to Mashinsky; instead, Cohen-Pavon provided legal advice on how Celsius traded CEL in the public markets from 2019 to 2022.
Celsius Founder Exposed! Sold Millions of CEL Tokens Over the Years, Selling Until Withdrawals Were Suspended
Celsius Sues Users for Transfers Before Bankruptcy
The Celsius bankruptcy liquidation team is also seeking a way out for creditors and has even filed lawsuits against specific account holders.
They accused users of making preferential transfers before bankruptcy, alleging that certain users withdrew large sums of money before bankruptcy, which could benefit them ahead of other creditors, violating the fairness principle of the bankruptcy process. Bankruptcy laws typically review such transfers to ensure fair distribution of funds to creditors.
Celsius Founder Exposed! Sold Millions of CEL Tokens Over the Years, Selling Until Withdrawals Were Suspended
As the trial approaches, Mashinsky's defense strategy for potential sentences of over a hundred years will rely on former employees as witnesses to the misconduct on the Celsius platform, potentially shifting the focus away from CEO Mashinsky's level of involvement.
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