- Alex Mashinsky, former Celsius CEO, accepted a guilty plea to the 2022 Celsius collapse and could face a life sentence.
- More than 200 victims submitted emotional statements to the court, suggesting that the maximum punishment should be imposed regarding their financial and emotional losses.
- Mashinsky withdrew millions ahead of the time when Celsius went bankrupt, infuriating investors who would no longer have access to their funds.
According to Bloomberg, Celsius Network’s former CEO, Alex Mashinsky, now faces a potential sentence to prison for life as hundreds of victims who invested in the platform ask a US judge to impose a life sentence on him. This is part of legal proceedings after the Celsius 2022 collapse.
The crypto lending company’s founder, Mashinsky, has already admitted to fraud charges related to the company’s downfall.
Over 200 Statements Targeted the Celsius Founder Directly
More than 200 of the statements made by people saying they suffered because of the collapse were submitted to the court this week. The judge has been informed by most of these victims that they want Mashinsky to receive the maximum punishment permitted by the law.
Brandon Lawrence, one of the investors, claimed that he has lost 1.5 Bitcoin (BTC) and now has debt and a damaged reputation. Alex Mashinsky’s and the company’s bankruptcy decision ruined his belief in cryptocurrency, he revealed.
Most of the victims are demanding the harshest sentence they can receive, while a few are willing to accept a lighter sentence if Mashinsky pays them back. Levenberg, a retired teacher who lost about $400,000 in retirement savings, suggested that a three-year sentence would be okay should he return the stolen money.
Mashinsky and his legal team appealed to the judge for no more than a one-year prison sentence. This, however, is not recommended by probation officers, who are suggesting 15 years.
Before Bankruptcy Filing, Alex Mashinsky Withdrew Millions
In June 2022, Celsius got into trouble by freezing customer withdrawals, preventing investors from accessing their money. Then, a month later, the company went bankrupt.
It had only $167 million available at the time, far less than what was required to pay its users back. Court records show that Alex Mashinsky and his wife subsequently pulled about $12 million in cryptocurrency before the company crashed.
Set up in 2018, Celsius used to have more than 200 workers and manage about $10 billion in crypto assets by 2021. A year later the company’s ascent came to an abrupt end, and its former CEO now faces the real possibility of spending the rest of his life in prison.
