Post by Buck ( Richard )

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Prosecutors have requested Alex Mashinsky, CEO of the collapsed Celsius cryptocurrency company, be sentenced to at least twenty years in prison for his "sustained, calculated campaign of deceit carried out over years, targeting ordinary people."

https://www.courtlistener.com/docket/67604619/144/united-states-v-mashinsky/

#Celsius #crypto #cryptocurrency

$• Due to Alex’s misrepresentation & blatant lies of how celsius was rehypothecating creditor's bitcoin, I lost my entire retirement savings, home, and am struggling to pay medical expenses.21 • Alex Mashinsky preyed upon the lowest hanging fruit—yearning people in need of financial success—which is why so many people were hurt by his actions. Myself included. . . Thousands of us are left scrounging and praying that we can get a tiny fraction of our previous claim returned.22 • I had placed all my cryptocurrency on Celsius Network because of statements made weekly by Mr. Mashinsky on his AMAs. I relied on what he said and he intentionally deceived me and misrepresented the facts. . . . I am a retired school teacher and I was counting on my cryptocurrency holdings to fund my retirement and to pass on to future generations. Mr. Mashinsky has changed my financial trajectory and that of my family. He will never understand the damage he has done to me and other victims.23 This is only a small sampling of the victim statements discussing the harm suffered by those who trusted Mashinsky. Contrary to Mashinsky’s claims, Mashinsky’s victims were not made whole by the bankruptcy process. On its effective date, the restructuring plan in the bankruptcy showed that the total estimate for allowed claims, which entirely or almost entirely includes customer claims, was over $5 billion—meani$

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The more than 200 victim letters submitted in connection with sentencing are heartbreaking. They reflect the devastating real-world impact that the defendant’s fraud had on working people who trusted him to keep their savings safe. For example: • He used my bitcoin to inflate the price of his printed CEL token and whilst insiders ran for the exits when the smoke alarm rang I stood firm inside believing the loans were secure when in reality Celsius operated as a hedge fund and crypto speculator . . . I was emotionally devasted into darkness followed by the shame of confronting all those I had convinced to invest in Celsius . . . My will to live remained only because I was a father to triplets and was responsible for their well-being.16 • I’m now 59 and lost my entire life savings (nearly 9 Bitcoin) in the Celsius bk case. Needless to say, at my age, it was absolutely devastating . . . I lost my apartment, I could no longer help my very sick mother, I had to liquidate everything else I owned just to scrape by. I literally had to ‘camp’ out of my vehicle for nearly a year until I could begin to get back on my feet. The suffering, depression, humiliation & despair was far beyond any jail term. I implore the Court to impose the absolute maximum sentence permissible when sentencing Alex. He still has no shame, no remorse nor any regret for robbing hundreds of thousands of victims

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$respect for the law, and the need to avoid unwarranted sentencing disparities, the Court should impose a term of imprisonment of no less than 20 years. I. The Nature, Circumstances, and Seriousness of the Offense Warrant a Significant Sentence The nature and circumstances of the defendant’s crimes are extraordinarily serious. First, the scope of Mashinsky’s fraud is staggering. Tens of thousands of customers deposited billions of dollars based on false assurances of safety and soundness. When Celsius inevitably collapsed, Celsius’s customers lost access to more than $5 billion dollars of their crypto, devastating the financial lives of countless victims. Even after the bankruptcy process, investors are short over $1 billion under even the most conservative calculation. Mashinsky’s criminal conduct was aimed at and harmed retail investors at an unimaginable scale. Mashinsky’s scheme focused on soliciting crypto from what he describes as “everyday people.” Def. Mem. at 14. As a result, almost all the victims of his crime were retail crypto investors whose losses constituted a significant portion of their savings and had devastating consequences on their lives. This was not a financial crime in which a few well-heeled hedge funds and sophisticated institutional investors lost a small fraction of their assets. It was a crime in which Mashinsky deliberately targeted real, “everyday”$

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Prosecutors say that such a severe sentence is necessary not only for deterrence, but because despite his guilty plea, Mashinsky has not fully accepted responsibility for his actions.

Sentencing guidelines recommend a 30 year sentence, which is only because of the statutory cap resulting from his guilty plea agreement; otherwise the recommendation would be life. Mashinsky has argued he should be sentenced to no more than a year in prison. Sentencing will happen on May 8.

#Celsius #crypto #cryptocurrency

of greed. Mashinsky calculated that the risk of jail was outweighed by the money he could bring into Celsius, which he then used to make himself wealthy. There is no reason to believe that, absent a serious sentence, his calculus will ever change. Nor will the prospect of forfeiting his ill-gotten gains suffice to deter Mashinsky from future misconduct. While he made over $48 million from his unlawful scheme, he spent most of that money on his lavish lifestyle, and it is unlikely his victims will ever be able to recover the full amount. He has shieled most of his substitute assets by putting them into an elaborate system of trusts that—while purportedly organized for the benefit of his children—continue to cover Mashinsky’s own living expenses with the consent of the trustee, Mashinsky’s sister. And even as Mashinsky claims to have agreed to forfeit the assets that the Government traced directly to the proceeds of his crimes, his wife has asserted that she has a superior claim to the property, which, if credited, will reduce what the Government seizes and returns to Mashinsky’s victims. Thus, even with the financial consequences of his guilty plea, Mashinsky will continue to be a very wealthy man, and could easily conclude that crime does pay, after all.

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Mashinsky’s failure to accept full responsibility for his crimes raises concerns about whether, absent a serious sentence, he will recognize the magnitude of his crimes and be deterred from returning to fraud if given the opportunity. Mashinsky’s sentencing submission shows that he has not truly reckoned with what he did, and he has shown remorse only for the fact that his scheme unraveled and he was caught. If Mashinsky cannot admit the full scope of his crimes, there is no reasonable assurance that he will not commit them again. Moreover, Mashinsky’s statements during the course of the fraud show that he has no respect for the law and is not, like most citizens, deterred by the mere prospect of consequences for his illegal actions. Mashinsky was brazen enough to falsely state in an AMA that Celsius does not make uncollateralized loans, and then assure his investors that the statement was true because “this will be fraud to say that. It will be fraud for me I’ll probably go to jail if I said that and it was untrue okay?” PSR ¶ 55(c). He knew he faced jail for his lies, but he lied anyway, because