The post Breaking: Celsius Founder Alex Mashinsky Hit With a 12-Year Prison Sentence for Crypto Fraud appeared first on Coinpedia Fintech News
Mashinsky was charged with misleading investors and customers about Celsius operations.
Restructuring of Celsius protocol under a creditor-owned Bitcoin mining has been ongoing.
Alex Mashinsky, the founder and former CEO of defund lending protocol Celsius (CEL), was sentenced to a 12-year prison term on Thursday, May 8. The United States District Judge John G. Koeltl at Manhattan’s Southern District noted that Mashinsky undertook a sweeping scheme to defraud investors.
The 12-year prison term was not what the federal prosecutor sought based on the identified charges. According to the federal prosecutor, Mashinsky ought to have been slapped with a 20-year prison term as a just punishment.
Notably, Mashinsky had already pleaded guilty to two counts of fraud, including commodities fraud and securities fraud. As part of the plea deal, Mashinsky agreed to forfeit $48 million and not appeal any sentence of up to 30 years.
However, the funds were a drop in the ocean as Celsius had an identified financial hole of more than $1 billion. Nevertheless, the court approved the restructuring plan for Celsius to a creditor-owned Bitcoin mining company dubbed Ionic Digital LLC.
What Next for Crypto Market After Mashinsky’s Sentencing
Since the cryptocurrency industry experienced the 2022 bear market, catalyzed by the Terra Luna and FTX collapse, lawmakers in different jurisdictions have put in place measures to protect web3 investors. In the United States, Sam Bankman Fried has been a key lesson to web3 developers seeking to override the set crypto regulatory rules.
As a result, the crypto market is well positioned to grow exponentially in the coming years, catalyzed by clear regulatory frameworks. Moreover, institutional investors have compelled global lawmakers to pay attention to digital assets as an alternative form of battle-tested investments.