CEL Exploded 80% as US DOJ Seeks 20-Year Sentence for Celsius Founder Mashinsky
TL;DR
- The token saw a sharp price increase after the DOJ called for a severe prison sentence for ex-Celsius CEO Alex Mashinsky, accusing him of years-long deception and financial misconduct.
- His court hearing is scheduled for May 8.
CEL Reacts to the Request
The native token of Celsius Network CEL has seen a steep decline in the past months, plunging below $0.06 earlier in April and later rising to around $0.08. Over the past 24 hours, though, it experienced an 80% price rally, climbing to a 12-week high of almost $0.18. It later lost some ground and currently trades at roughly $0.14 (per CoinGeckos data), representing a 70% increase on a daily scale.
Despite the recent surge, it stands far away from the all-time high of over $8 observed in June 2021. Back then, the assets market capitalization neared $3.5 billion, while as of this writing it is at a mere $5.1 million.
CELs latest upswing follows the US Department of Justices (DOJ) request for a 20-year prison sentence for former Celsius CEO Alex Mashinsky. The federal executive department of the American government described this as just punishment for his years-long campaign of lies and self-dealing that left in its wake billions in losses and thousands of victimized customers.
The DOJ further argued that Mashinsky misrepresented how Celsius Network handled customer deposits, fabricated the entitys profitability, and risked clients funds on uncollateralized loans and secret trades despite promising he wouldnt.
The condemnation continued with allegations that the former CEO manipulated the price of CEL by creating artificial demand, allowing him to profit by selling his personal stash of tokens at inflated values.
Mashinskys conduct made him rich at the expense of Celsiuss customers. When Celsius collapsed into bankruptcy, it wiped out the savings of ordinary retail investors who entrusted their cryptocurrency to the company based on Mashinskys lies, the document reads.
The sentencing of Celsiuss former boss is scheduled for May 8. He previously pled guilty to two counts of fraud: one count of commodities fraud and one of securities fraud. He admitted to making false claims about Celsiuss Earn program, which misled investors into depositing their Bitcoin on the platform earning him an estimated $48 million profit in the process.
The Celsius Saga
Celsius Network was once a prominent crypto lending platform. In the summer of 2022, though, the company halted customer withdrawals, swaps, and transfers due to extreme market conditions, disclosing serious liquidity issues. Shortly after, the entity filed for Chapter 11 bankruptcy, revealing a $1.2 billion balance sheet hole and debts of $4.7 billion to users.
The following investigations showed that former CEO Mashinsky supposedly misused customer funds and manipulated the price of CEL. He was arrested in July 2023 on multiple fraud charges and later released on a $40 million bond secured by his Manhattan residence.
In November 2023, the New York Southern Bankruptcy Court approved a reorganization plan, enabling Celsius to exit bankruptcy. A major component of the program was the creation of a new Bitcoin mining entity, called Ionic Digital, which is owned by Celsiuss creditors.
At the beginning of last year, the company started distributing more than $3 billion in cryptocurrency and fiat to affected users as part of its restructuring plan. By the end of August 2024, Celsius had handed out approximately 93% of the approved amount to over 250,000 creditors across 165 countries. A few months later, the company announced plans to distribute an additional $127 million to creditors.
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Text source: CryptoPotato
