Celsius founder Alex Mashinsky Arrested, Charged with Fraud

 

- Alex Mashinsky, the founder of bankrupt cryptocurrency lender Celsius Network, was arrested by US authorities and charged with fraud and market manipulation.

Imagine this - you put your money into a "bank" that pays out really high interest rates and promises to be totally safe. But behind the scenes, it's making risky investments, lying about its funds and profitability, and ultimately collapsing into bankruptcy. That describes the sad saga of cryptocurrency platform Celsius and its bombastic founder, Alex Mashinsky.

Mashinsky, once known as "Uncle Cel" for promoting Celsius, was arrested by the feds this week and charged with running a massive fraud. Prosecutors allege that Mashinsky duped over a million investors into pouring billions into Celsius with misleading sales pitches and false claims.

Authorities say Celsius portrayed itself as a "modern day bank" when in reality it operated more like a "risky investment fund" that lacked anywhere near the promised profits. The company also used customer deposits to manipulate the price of its own CEL token, allowing it to sell at inflated prices.

As the indictment shows, Mashinsky and Celsius ran an elaborate deception centered around phony spreadsheets, made-up users numbers, and hiding the fact that Celsius had to use over 80% of revenue just to pay interest to early investors. When crypto markets crashed last year, this whole pyramid scheme came crashing down.

Celsius filed for bankruptcy in July 2022 after the company "froze" users' assets, locking them out of access to billions of dollars. Thousands of angry investors were left with nothing.

Now Mashinsky, known as"Uncle Cel" for promoting the project on YouTube,faces criminal fraud charges. The SEC also filed a lawsuit seeking to ban him from the crypto industry for life while getting fines and penalties.

After the lies and deception are peeled away, all that's left of Celsius is a cautionary tale of crypto hype and mania that ended in total collapse and ruin for investors who thought they'd found a miracle high-yield savings account. But in the end, it was just another wild Ponzi scheme.

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XRP's Landmark Victory Over the SEC Sets a Positive Precedent for All Cryptocurrencies

 

Ripple's momentous win against the SEC this week is cause for celebration throughout the crypto community. This is big, since not only did it immediately boost XRP's price and reputation, but it also sets an important legal precedent that should give hope to other projects facing similar regulatory challenges, like Coinbase.

In simple terms, Judge Analisa Nadine Torres's ruling that XRP is "not a security on its face" means that the simple act of creating and selling a cryptocurrency token doesn't automatically make it a regulated security. The SEC will have to provide more detailed analysis on a case-by-case basis to prove that a token actually functions as an investment contract.

Prior to this ruling, there was a lot of uncertainty in the crypto space about where the regulatory lines would be drawn. Many projects feared the SEC might just label any popular cryptocurrency a "security" and severely restrict its usage.

But now we know that's not the case. If a cryptocurrency truly functions as a blockchain-based payment network or application - like Ripple has long argued for XRP - it has a strong case for not being classified as a security.

This positive development is great news for many of the major cryptocurrencies like Bitcoin, Ethereum, Litecoin and others that have always seen themselves as decentralized networks, not "securities".

The ruling also gives projects like Polygon, Solana, Cardano and Tron more confidence to continue operating and innovating without fear that the SEC might come knocking at their door and suddenly label their tokens "securities".

Clearly, there's still a lot of work to be done in terms of actual crypto regulation. But Ripple's landmark victory helps move the industry in the right direction by providing much-needed legal clarity and shining a light on the path forward.

Crypto investors breathed a collective sigh of relief today as Ripple's win significantly reduces regulatory uncertainty, giving hope and optimism that the crypto revolution can march on unimpeded. It was truly an incredible event for the entire industry.

 

Veteran crypto investor Adam Cochran Twitted:

1/5

Ripple case, here is the good and the bad.

But it is mostly *VERY* good for all alts, and a surprisingly big win for XRP.

First Judge did decide institutional sales/fundraising was securities. pic.twitter.com/esmjcIrzN0

— Adam Cochran (adamscochran.eth) (@adamscochran) July 13, 2023

 

Jake Chervinsky, Chief Policy Officer at Blockchain Association, said the ruling a win for crypto exchanges: 

Not legal advice, but my sense is US crypto exchanges should feel good about relisting XRP today.

— Jake Chervinsky (@jchervinsky) July 13, 2023