Tether In Spotlight as Celsius Founder Admits to Fraud

Tether, the largest stablecoin in the world, may face increased scrutiny after a major claim made by Alex Mashinsky, the former founder of Celsius Network. Mashinsky, who recently admitted to fraud charges, said that his crypto lending platform was a fraudulent business. His cooperation with U.S. prosecutors could put Tether’s operations under scrutiny. Alex Mashinsky Sentence to Come Soon The United States Attorney’s Office for the Southern District of New York announced that Mashinsky pleaded guilty to one count of committing commodities and securities fraud. Mashinsky’s guilty plea marks a turning point in the case, as he acknowledges his role in misleading investors and mishandling funds. Alex agreed to forfeit $48 million in ill-gotten funds as part of his plea. Meanwhile, according to reports, Mashinsky will be sentenced on April 8, 2025. He could face up to 30 years in prison, depending on how the district judge views Mashinsky’s honesty about his regrets. The ex-CEO has agreed to share what he knows about Tether’s operations, hoping to get a lighter sentence. While Mashinsky still faces legal challenges, his willingness to help prosecutors could change how people view Tether and its role in the crypto market. As the investigation continues, the industry prepares for possible new information that could reshape its regulations. Celsius Network Says Tether Acted Unreasonably Recall that the once-renowned digital asset platform initiated a lawsuit against Tether and its affiliated entities . Celsius had a loan agreement with Tether in 2020. In 2021, Tether lent Celsius about $1 billion at an interest rate between 5% and 6%, with Bitcoin as collateral. According to the complaint, Celsius asserted that Tether acted in bad faith by hastily liquidating some amount of BTC, violating the terms of their agreement. Celsius also sought compensation for the contract breach. It requested the court to direct Tether to return the value of the BTC or an equivalent amount as compensation. However, Tether CEO Paolo Ardoino called the lawsuit a “baseless shakedown.” Paolo defended Tether’s actions and the integrity of its contractual obligations. Celsius Network Files for Bankruptcy Protection Celsius filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York in July 2022. Amidst its bankruptcy proceedings, the firm sought favorable settlements for its creditors. This led to a proposal to resolve claims from customers who alleged fraud by increasing recoveries by 5%. However, in February, the bankrupt crypto lending platform officially exited bankruptcy and returned over $3 billion in crypto and fiat to its users affected by the firm’s sudden halt. As reported by TheCoinRise, Celsius’s exit from bankruptcy saw the creation of a new Bitcoin mining company managed by crypto mining firm Hut 8. The platform added that the new firm would continue delivering recoveries to creditors. Meanwhile, Alex resigned as the platform’s CEO in 2022. Alex was accused of making trade calls leading to the firm’s bankruptcy. The post Tether In Spotlight as Celsius Founder Admits to Fraud appeared first on TheCoinrise.com .