Former Celsius CEO Faces Potential 115-Year Sentence Amid Bankruptcy Case

Former Celsius CEO Alex Mashinsky has requested the court to allow six witnesses to testify in the bankruptcy case involving the lending platform. The entrepreneur faces a potential prison sentence of up to 115 years, reports The Block.

In July 2023, media outlets reported Mashinsky’s arrest.

According to court documents reviewed by insiders, the SEC has filed a lawsuit against the company and its former leader. The publication notes that the case is sealed.

The regulator accused Celsius of raising funds through fraudulent and unregistered sales of “crypto asset securities,” repeatedly misleading investors about its financial condition, and manipulating the price of its native token CEL.

Earlier, journalists reported on the CFTC‘s preparation of a lawsuit against the platform. Agency lawyers concluded that the company and Mashinsky misled clients and engaged in financial activities without a license.

At the beginning of 2023, the New York Attorney General accused the Celsius CEO of defrauding investors of “billions of dollars.”

According to the petition, the witnesses include organization employees, ranging from the chief revenue officer to the chief financial officer. According to lawyers, many of them reside outside the United States.

Mashinsky’s defense claims that their client did not intend to harm anyone.

“As CEO of Celsius, he relied on information provided to him by an experienced team of professionals,” the document states.

During weekly AMA sessions conducted by Mashinsky, legal and risk department staff made amendments but did not inform him of them.

As a result, the accused expected that “any accidental or unintentional inaccuracies in his public statements would be brought to his attention,” the lawyers emphasized.

In June 2022, Celsius suspended withdrawals, exchanges, and transfers between accounts “due to extreme market conditions.”

Following the bankruptcy filing, Celsius reported a $1.2 billion “hole” in its balance sheet. In August, it became known that the company’s liabilities exceeded its assets by $2.85 billion.

In September, platform head Alex Mashinsky resigned as CEO.