Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the developments of the Celsius case as over 200 victims make pleas.
200+ Pleas Against Celsius and Mashinsky
Prosecutors in the United States have shared over 200 victim impact statement as part of their case against admitted fraudster Alex Mashinsky for his role in the now defunct crypto lender Celsius Network. The statements were filed from hundreds of the victims involved in their case against Mashinsky and recently sworn-in interim US Attorney for Manhattan, Jay Clayton, said in an April 23 court letter as part of the Manhattan federal court that he was sharing “more than 200 victim impact statements” collected by his office.
There is a total of 418 pages as part of the of the statements from Celsius users, and same are named while others only used their initials. The documents provide a detailed account of the financial destruction and emotional fallout along with the impact that the collapse of the firm had on their lives and how much money was lost as a result. Among some of the statements from the victims it noted how they had entrusted their life savings to Celsius and had believed Mashinsky’s assurances that the platform was safe. Some others wrote how they were dismayed at the amount returned to them as a result of the company’s bankruptcy proceedings, which many said was less than the amount they put into the platform.
Prior to its collapse the Celsius Network had allowed users to deposit crypto in return for earning a yield. They also offered loans with crypto posted as collateral but in mid-2022 the platform blocked withdrawals as a massive crypto market crash resulted in the company having to file for bankruptcy in July.
Mashinsky was handed seven charges, including alleging he misled investors and orchestrated a multibillion-dollar scheme, by the Justice Department in July 2023 but he took a plea deal and copped to a count each of commodities and securities fraud in December. These carried a maximum sentence of 30 years in prison if served consecutively. His admission sets a rare precedent in the crypto sector where a founder accepted personal liability rather than hide behind corporate bankruptcies.
https://x.com/SECGov/status/1679604487726481409
The CFTC had also ruled that both Celsius and Mashinsky had violated United States trading laws and failed to register the platform appropriately. While legal proceedings were drawn out, Celsius began returning funds to creditors in August 2024. They paid back around 84% of the total assets owed, amounting to $3 billion.
Not all impacted users have received or even claimed their assets. A court filing shows 64,000 creditors are owed less than $100, while 41,000 others are due between $100 and $1,000 in crypto. Among the victim statements a large number of them called for Mashinsky to be imprisoned under the maximum allowable sentence. Two apparently called for the courts to go easy on him.
One statement, written by a person identifying themselves as “Mike,” said further punishing Mashinsky would be “unreasonably excessive” as he claimed, without evidence, that the Celsius founder “was the target of a coordinated attack” by Sam Bankman-Fried, a convicted fraudster and former CEO of the collapsed crypto exchange FTX.
Another statement from a victim called Brian Salter, who lost over $7 million across three Celsius accounts, notes how he now faces a lawsuit from Celsius for withdrawing funds before the collapse, a move the company calls a “clawback.” He stated:
“I am still defending myself in this lawsuit now, wasting more money and time.”
Others, such as Artur Abreu, said that Mashinsky should be given leniency as he’s shown remorse, and macroeconomic factors at the time majorly contributed to Celsius’ collapse. One user stated:
“If stealing from innocent people is unethical, it doesn’t become ‘right’ just because the sum is over $100K. The solution to theft isn’t more theft. We’re here because of the abuse by Mashinsky and his executives, not the people trying to protect their savings.”
Have a great day.
Peace. CryptoGod-1.
Referral Links and Follow Me:
