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Mashinsky attended a few different universities where he majored in [[electrical engineering]] but did not graduate. He served in the [[Israel Defense Forces|Israeli Army]], where he trained as a pilot and served in the [[Golani Brigade]], from 1984 to 1987.<ref name="reuters-2023-01-05" /><ref name="Guth 2000" /> In 1988, he left Israel and moved to the United States.<ref name="Light 2000">{{Cite journal|last1=Light|first1=Jay O.|last2=Green|first2=Daniel J.|date=2000-07-21|title=Arbinet Communications, Inc. (A)|url=https://www.hbs.edu/faculty/Pages/item.aspx?num=27338|journal=Harvard Business School Case Collection|publisher=Harvard Business School|edition=January 2001|issue=Case 201-006|pages=4–5|access-date=2018-04-09|archive-date=2019-10-01|archive-url=https://web.archive.org/web/20191001053950/https://www.hbs.edu/faculty/Pages/item.aspx?num=27338|url-status=live}}</ref><ref name="Garmhausen 2018" /><ref name="reuters-2023-01-05">{{cite news |last1=Mccrank |first1=John |last2=Lang |first2=Hannah |title=Who is Alex Mashinsky, the man behind the alleged Celsius crypto fraud? |url=https://www.reuters.com/technology/who-is-alex-mashinsky-man-behind-alleged-celsius-crypto-fraud-2023-01-05/ |access-date=March 19, 2023 |work=Reuters |date=January 5, 2023 |language=en}}</ref>
Mashinsky attended a few different universities where he majored in [[electrical engineering]] but did not graduate. He served in the [[Israel Defense Forces|Israeli Army]], where he trained as a pilot and served in the [[Golani Brigade]], from 1984 to 1987.<ref name="reuters-2023-01-05" /><ref name="Guth 2000" /> In 1988, he left Israel and moved to the United States.<ref name="Light 2000">{{Cite journal|last1=Light|first1=Jay O.|last2=Green|first2=Daniel J.|date=2000-07-21|title=Arbinet Communications, Inc. (A)|url=https://www.hbs.edu/faculty/Pages/item.aspx?num=27338|journal=Harvard Business School Case Collection|publisher=Harvard Business School|edition=January 2001|issue=Case 201-006|pages=4–5|access-date=2018-04-09|archive-date=2019-10-01|archive-url=https://web.archive.org/web/20191001053950/https://www.hbs.edu/faculty/Pages/item.aspx?num=27338|url-status=live}}</ref><ref name="Garmhausen 2018" /><ref name="reuters-2023-01-05">{{cite news |last1=Mccrank |first1=John |last2=Lang |first2=Hannah |title=Who is Alex Mashinsky, the man behind the alleged Celsius crypto fraud? |url=https://www.reuters.com/technology/who-is-alex-mashinsky-man-behind-alleged-celsius-crypto-fraud-2023-01-05/ |access-date=March 19, 2023 |work=Reuters |date=January 5, 2023 |language=en}}</ref>


== Career ==
Alex Mashinsky is a FRAUD

Mashinsky has worked in a variety of different industries, often focusing on popular technologies. The ''Wall Street Journal'' described him in 2022 as "a brash, confident [[serial entrepreneur]] with a constant stream of big ideas". On several occasions, Mashinsky has left his companies after a period of conflict or tension.<ref name="wsj-2022-08-06" />

After relocating to [[New York City]], Mashinsky ran a business trading contracts for delivery of chemicals such as [[urea]], [[gold]], and [[sodium cyanide]]. However, after the [[Tiananmen Square protests of 1989]], the business slowed as exports of sodium cyanide from China fizzled. Mashinsky then worked at A+ Systems, a computer-based voicemail software company for phone carriers.<ref name="Guth 2000" />

===Telecommunications companies===

Mashinsky was an early developer of [[Voice over IP|voice over Internet Protocol]] (VOIP).<ref>{{Cite news|url=https://www.bloomberg.com/news/articles/2018-05-02/a-verbal-cryptobrawl-breaks-out-at-milken-over-bitcoin-s-future|title=A Verbal Cryptobrawl Breaks Out at Milken Over Bitcoin's Future|last=Leising|first=Matthew|date=2018-05-02|work=Bloomberg|access-date=2018-05-04|language=en|archive-date=2018-05-04|archive-url=https://web.archive.org/web/20180504093352/https://www.bloomberg.com/news/articles/2018-05-02/a-verbal-cryptobrawl-breaks-out-at-milken-over-bitcoin-s-future|url-status=live}}</ref><ref name="Surden 2018">{{Cite news|url=http://www.nj.com/hobokennow/index.ssf/2012/03/transit_wireless_founder_advis.html|title=Transit Wireless founder advises entrepreneurs at NJ Tech Meetup to take personality test|last=Surden|first=Esther|date=March 26, 2012|work=The Jersey Journal|access-date=April 9, 2018|language=en-US|archive-date=April 10, 2018|archive-url=https://web.archive.org/web/20180410073340/http://www.nj.com/hobokennow/index.ssf/2012/03/transit_wireless_founder_advis.html|url-status=live}}</ref> In the early 1990s, he founded VoiceSmart, one of the first companies to offer computer-based VOIP phone service.<ref name="Light 2000" /> By 1993, Mashinsky had realized the potential for a commodity market for international telephone capacity.<ref>{{Cite magazine|url=https://www.economist.com/node/599143|title=Down with distance|date=September 11, 1997|magazine=The Economist|language=en|access-date=2018-04-09|archive-date=2018-04-10|archive-url=https://web.archive.org/web/20180410072421/https://www.economist.com/node/599143|url-status=live}}</ref> So, in 1996, Mashinsky founded Arbinet, a marketplace for [[Voice over IP|VoIP]] telephone service.<ref name="Light 2000" /><ref name="Garmhausen 2018" /> The platform was one of the first to allow telecommunication companies to trade minutes.<ref name="Schiesel 2018">{{Cite news|url=https://www.nytimes.com/1999/07/11/business/jumping-off-the-bandwidth-wagon.html|title=Jumping Off the Bandwidth Wagon|last=Schiesel|first=Seth|date=1999-07-11|work=The New York Times|access-date=2018-03-30|language=en-US|issn=0362-4331|archive-date=2020-10-30|archive-url=https://web.archive.org/web/20201030042154/https://www.nytimes.com/1999/07/11/business/jumping-off-the-bandwidth-wagon.html|url-status=live}}</ref> In November 1997, Arbinet began offering a similar service for data connectivity, allowing the more than 400 [[Digital Signal 1|T1 lines]] connected to its New York hub to exchange their unused [[Bandwidth (computing)|bandwidth]].<ref name="McDonald 2003">{{Cite news|url=http://business2.com:80/articles/mag/0,1640,12954,00.html|title=Fast Times on the Minute Exchange|last=McDonald|first=Glenn|date=April 1999|work=Business 2.0|access-date=April 9, 2018|archive-url=https://web.archive.org/web/20030611100038/http://business2.com/articles/mag/0,1640,12954,00.html|archive-date=2003-06-11|url-status=dead}}</ref>

In 2005, he sold his stake in Arbinet and used part of the profits from the sale to start GroundLink.<ref name="Garmhausen 2018" /> The company allowed people to book limousine and car service from a smartphone or computer.<ref>{{Cite news|url=http://www.crainsnewyork.com/article/20100926/SMALLBIZ/309269970|title=Ground-transport firm flying high|last=Zimmerman|first=Eilene|date=September 26, 2010|work=Crain's New York Business|access-date=2018-04-09|archive-date=2017-04-18|archive-url=https://web.archive.org/web/20170418082519/https://www.crainsnewyork.com/article/20100926/SMALLBIZ/309269970|url-status=live}}</ref> Mashinsky was inspired to start the company after a car he had reserved for himself and his wife failed to pick them up, along with a business associate he was trying to impress, from the airport.<ref name="Garmhausen 2018" /> In 2010, Mashinsky organized a joint venture between GroundLink and several limousine and car service companies. These companies with LimoRes Car & Limo Service, a company Mashinsky also founded, installed free Wi-Fi service funded solely by sales of advertising.<ref>{{Cite news|url=https://www.wsj.com/articles/SB10001424052748704499604575407773797744474|title=Coming Soon to City, Wi-Fi on the Go|last=Grossman|first=Andrew|date=2010-08-04|work=The Wall Street Journal|access-date=2018-04-09|language=en-US|issn=0099-9660|archive-date=2018-04-10|archive-url=https://web.archive.org/web/20180410135810/https://www.wsj.com/articles/SB10001424052748704499604575407773797744474|url-status=live}}</ref> He also partnered with [[Gogo Inflight Internet]] to offer the free service on US flights.<ref name="Kolodny 2018">{{Cite web|url=https://techcrunch.com/2010/08/10/free-wifi-gogo-groundlink/|title=Gogo and Groundlink's Partnership, Free Inflight Internet Deal|last=Kolodny|first=Lora|date=August 10, 2010|website=TechCrunch|access-date=2018-04-09|archive-date=2017-07-05|archive-url=https://web.archive.org/web/20170705102521/https://techcrunch.com/2010/08/10/free-wifi-gogo-groundlink/|url-status=live}}</ref>

Mashinsky's company Q-Wireless is one of the four companies that made up [[Transit Wireless]], a joint venture to install wireless cellphone and free [[Wi-Fi]] internet service in the [[New York City Subway]] system.<ref name="Donohue 2018">{{Cite news|url=http://www.nydailynews.com/new-york/subway-tunnels-not-stations-set-wi-fi-cell-signals-article-1.468634|title=Subway tunnels set to get Wi-Fi, cell signals|last=Donohue|first=Pete|date=July 30, 2010|work=New York Daily News|access-date=2018-04-09|archive-date=2018-04-10|archive-url=https://web.archive.org/web/20180410072816/http://www.nydailynews.com/new-york/subway-tunnels-not-stations-set-wi-fi-cell-signals-article-1.468634|url-status=live}}</ref> It took Mashinsky three years to convince the [[Metropolitan Transportation Authority|MTA]] to determine if there was a demand for cell phone service inside the subway system, and two more years for the authority to request a proposal.<ref name="Surden 2018" /> By 2010,<ref name="Donohue 2018" /> his company had received a contract to install the service at 277 below-ground subway stations in New York City.<ref name="Surden 2018" />

In April 2014, Mashinsky was named to the board of directors of [[MiFi|Novatel]], a provider of [[Hotspot (Wi-Fi)|Wi-Fi hotspot]] products.<ref>{{Cite news|url=http://www.sandiegouniontribune.com/business/technology/sdut-Novatel-Wireless-shareholders-settlement-proxy-2014apr29-story.html|title=Novatel Wireless settles shareholder spat|last=Freeman|first=Mike|date=April 29, 2014|work=The San Diego Union-Tribune|access-date=2018-04-09|archive-date=2018-04-10|archive-url=https://web.archive.org/web/20180410072236/http://www.sandiegouniontribune.com/business/technology/sdut-Novatel-Wireless-shareholders-settlement-proxy-2014apr29-story.html|url-status=live}}</ref> He was appointed CEO in June of that year.<ref>{{Cite news|url=https://www.sdbj.com/news/2014/dec/04/return-roots/|title=Return to Roots|last=Graves|first=Brad|date=December 4, 2014|work=San Diego Business Journal|access-date=2018-04-09|archive-date=2020-08-12|archive-url=https://web.archive.org/web/20200812232015/http://www.sdbj.com/news/2014/dec/04/return-roots/|url-status=live}}</ref><ref>{{Cite news|url=http://www.sandiegouniontribune.com/business/technology/sdut-Novatel-Wireless-activist-shareholders-Mashinsky-2014jun13-story.html|title=Shareholders push out Novatel CEO|last=Freeman|first=Mike|date=June 13, 2014|work=The San Diego Union-Tribune|access-date=2018-04-09|archive-date=2018-04-10|archive-url=https://web.archive.org/web/20180410134630/http://www.sandiegouniontribune.com/business/technology/sdut-Novatel-Wireless-activist-shareholders-Mashinsky-2014jun13-story.html|url-status=live}}</ref> In October 2015, Mashinsky left his position at Novatel after a year and a half as CEO of the company.<ref>{{Cite news|url=http://www.sandiegouniontribune.com/business/sdut-novatel-wireless-mifi-mashinsky-swenson-falcone-2015oct29-story.html|title=Novatel Wireless fires CEO, names replacement|last=Freeman|first=Mike|date=October 29, 2015|work=The San Diego Union-Tribune|access-date=2018-04-09|archive-date=2018-04-10|archive-url=https://web.archive.org/web/20180410072150/http://www.sandiegouniontribune.com/business/sdut-novatel-wireless-mifi-mashinsky-swenson-falcone-2015oct29-story.html|url-status=live}}</ref> In a 2018 deposition, Mashinsky said that he was terminated from his post because he refused to move from New York to Novatel's San Diego headquarters.<ref name="wsj-2022-08-06" />

RTX, a London-based [[financial technology]] firm in the telecom industry, hired Mashinsky as Global CEO in September 2016.<ref name="telecomreseller-2016-09-16">{{cite news |last1=Ralls |first1=Amy |title=Alex Mashinsky Joins RTX to Fuel Global Growth |url=https://telecomreseller.com/2016/09/15/alex-mashinsky-joins-rtx-to-fuel-global-growth/ |access-date=August 9, 2022 |work=Telecom Reseller |date=September 16, 2016 |archive-date=August 10, 2022 |archive-url=https://web.archive.org/web/20220810050936/https://telecomreseller.com/2016/09/15/alex-mashinsky-joins-rtx-to-fuel-global-growth/ |url-status=live }}</ref> After six months in the role, following a dispute with management, Mashinsky left the company, according to his 2018 deposition.<ref name="wsj-2022-08-06" />

=== Celsius Network ===
In 2017, Mashinsky founded [[Celsius Network]], a borrowing and lending platform for digital assets like [[Bitcoin]], [[Ethereum]] and other cryptocurrencies.<ref name="venturebeat">{{Cite news|url=https://venturebeat.com/2017/10/10/celsius-is-using-blockchain-technology-to-disrupt-the-1-1-trillion-consumer-credit-industry/|title=Celsius aims to disrupt the consumer credit industry using blockchain|last=Rogers|first=Stewart|date=2017-10-10|work=VentureBeat|access-date=2018-04-09|archive-date=2020-11-12|archive-url=https://web.archive.org/web/20201112015221/https://venturebeat.com/2017/10/10/celsius-is-using-blockchain-technology-to-disrupt-the-1-1-trillion-consumer-credit-industry/|url-status=live}}</ref><ref name="wsj">{{cite news | url = https://www.wsj.com/articles/crypto-lending-company-celsius-names-new-cfo-11645213196 | work = The Wall Street Journal | title = Crypto Lending Company Celsius Names New CFO | accessdate = 22 April 2022 | archive-date = 15 March 2022 | archive-url = https://web.archive.org/web/20220315000351/https://www.wsj.com/articles/crypto-lending-company-celsius-names-new-cfo-11645213196 | url-status = live }}</ref> It encouraged its customers to "unbank" themselves and offered interest rates as high as 18.6 per cent on cryptocurrency deposits.<ref>{{cite news |last1=MacColl |first1=Margaux |title=Crypto Wants Its Cash Back: Inside the Small but Mighty Legal Crusade to Win Back Lost Savings |url=https://www.theinformation.com/articles/the-crypto-mob-grabs-its-pitchforks-inside-the-legal-crusade-to-win-back-investors-lost-cash |work=The Information |date=8 July 2022 |access-date=30 July 2022 |archive-date=30 July 2022 |archive-url=https://web.archive.org/web/20220730220311/https://www.theinformation.com/articles/the-crypto-mob-grabs-its-pitchforks-inside-the-legal-crusade-to-win-back-investors-lost-cash |url-status=live }}</ref>

As CEO, he hosted "Ask Mashinsky Anything", a weekly YouTube [[Livestreaming|livestream]] in which he answered questions about Celsius. He became known for wearing T-shirts reading "Banks are not your friends", for his critical comments about unsuccessful businesses (including his own), and for [[publicity stunts]] such as an attempt to vandalize a branch of [[Chase Bank]].<ref name="inside-celsius">{{Cite news |date=2022-07-13 |title=Inside Celsius: how one of crypto's biggest lenders ground to a halt |work=Financial Times |url=https://www.ft.com/content/4fa06516-119b-4722-946b-944e38b02f45 |access-date=2022-07-14 |archive-date=2022-07-14 |archive-url=https://web.archive.org/web/20220714023638/https://www.ft.com/content/4fa06516-119b-4722-946b-944e38b02f45 |url-status=live }}</ref><ref name="ft-2022-06-17">{{cite news |last1=Oliver |first1=Joshua |last2=Shubber |first2=Kadhim |title=Alex Mashinsky, Celsius founder feeling the heat |url=https://www.ft.com/content/18b6fb80-44dd-40ed-b5ea-3f3bf2814c7d |access-date=July 17, 2022 |work=Financial Times |date=June 17, 2022 |archive-date=July 17, 2022 |archive-url=https://web.archive.org/web/20220717170423/https://www.ft.com/content/18b6fb80-44dd-40ed-b5ea-3f3bf2814c7d |url-status=live }}</ref>

In January 2022, Mashinsky took control of Celsius's trading strategy. Some insiders reported that he personally directed large individual cryptocurrency trades, overruling executives with significant financial experience.<ref>{{Cite news |date=2022-08-16 |title=Alex Mashinsky took control of Celsius trading strategy months before bankruptcy |work=Financial Times |url=https://www.ft.com/content/43d4fb5d-72a1-468c-aac8-9e11c4693f4e |access-date=2022-08-30 |archive-date=2022-08-30 |archive-url=https://web.archive.org/web/20220830152748/https://www.ft.com/content/43d4fb5d-72a1-468c-aac8-9e11c4693f4e |url-status=live }}</ref>

Mashinsky withdrew $10 million from Celsius in May 2022. The withdrawals came as customers were withdrawing assets in large quantities while the company was nearing bankruptcy, according to a report in October 2022. A spokesperson for Mashinsky told the ''Financial Times'' that the funds were used for tax payments and [[estate planning]].<ref>{{Cite news |date=2022-10-03 |title=Celsius Network founder withdrew $10mn ahead of bankruptcy |work=Financial Times |url=https://www.ft.com/content/5f7c9eab-ca5f-4425-91be-5781313c9723 |access-date=2022-10-03 |archive-date=2022-10-02 |archive-url=https://web.archive.org/web/20221002224220/https://www.ft.com/content/5f7c9eab-ca5f-4425-91be-5781313c9723 |url-status=live }}</ref> In total, Arkham Intelligence estimates that Mashinsky sold $44 million worth of CEL tokens through exchanges.<ref name="inside-celsius" />

On July 13, 2022, one month after it paused customer withdrawals, Celsius filed for [[Chapter 11, Title 11, United States Code|Chapter 11 bankruptcy]].<ref name="bankruptcy">{{cite news |last1=Gladstone |first1=Alexander |last2=Ge Huang |first2=Vicky |last3=Biswas |first3=Soma |title=Crypto Crash Drags Lender Celsius Network Into Bankruptcy |url=https://www.wsj.com/articles/crypto-crash-drags-lender-celsius-network-into-bankruptcy-11657758483 |access-date=July 14, 2022 |work=The Wall Street Journal |date=July 14, 2022 |archive-date=August 26, 2022 |archive-url=https://web.archive.org/web/20220826013525/https://www.wsj.com/articles/crypto-crash-drags-lender-celsius-network-into-bankruptcy-11657758483 |url-status=live }}</ref> Mashinsky said that "the Company made what, in hindsight, proved to be certain poor asset deployment decisions."<ref name=":6">{{Cite web |last=Mashinsky |first=Alex |date=July 14, 2022 |title=Declaration of Alex Mashinsky, Chief Executive Officer of Celsius Network LLC, in Support of Chapter 11 Petitions and First Day Motions |url=https://cases.stretto.com/public/x191/11749/PLEADINGS/1174907142280000000096.pdf |access-date=July 14, 2022 |archive-date=July 14, 2022 |archive-url=https://web.archive.org/web/20220714190312/https://cases.stretto.com/public/x191/11749/PLEADINGS/1174907142280000000096.pdf |url-status=live }}</ref><ref name="wsj-2022-07-15">{{cite news |last1=Biswas |first1=Soma |last2=Huang |first2=Vicky Ge |title=Celsius Owes Users More Than $4.7 Billion |url=https://www.wsj.com/articles/celsius-owes-users-more-than-4-7-billion-11657841826 |access-date=July 15, 2022 |work=The Wall Street Journal |date=July 15, 2022 |archive-date=September 1, 2022 |archive-url=https://web.archive.org/web/20220901223136/https://www.wsj.com/articles/celsius-owes-users-more-than-4-7-billion-11657841826 |url-status=live }}</ref>

Mashinsky resigned as Celsius CEO on September 27, 2022. Chris Ferraro, the former CFO of Celsius, was appointed to replace him as interim CEO. The Unsecured Creditors Committee, an organization of depositors, described the executive change as "a positive step" towards resolving the cases against Celsius.<ref name="cnbc-2022-09-27">{{cite news |last1=Capoot |first1=Ashley |last2=Rooney |first2=Kate |last3=Tortorelli |first3=Paige |title=Celsius CEO resigns in the middle of bankruptcy proceedings |url=https://www.cnbc.com/2022/09/27/celsius-ceo-resigns-in-the-middle-of-bankruptcy-proceedings.html |access-date=September 27, 2022 |work=CNBC |date=September 27, 2022 |archive-date=September 27, 2022 |archive-url=https://web.archive.org/web/20220927153849/https://www.cnbc.com/2022/09/27/celsius-ceo-resigns-in-the-middle-of-bankruptcy-proceedings.html |url-status=live }}</ref>


==Recognition==
==Recognition==

Revision as of 09:34, 7 December 2023

Alex Mashinsky
Mashinsky in 2021
Born1965 (age 58–59)[1]
Ukrainian SSR, Soviet Union (present-day Ukraine)
CitizenshipIsrael, United States
Occupation(s)Entrepreneur, CEO
EmployerCelsius Network
SpouseKrissy Mashinsky
Children6
Military career
Allegiance Israel
Service / branch Israel Defense Forces
Years of service1984–1987
UnitGolani Brigade
Websitewww.mashinsky.com

Alex Mashinsky (born 1965) is a Ukrainian-born Israeli-American entrepreneur, business executive and alleged fraudster. He is a cofounder and former CEO of Celsius Network, a bankrupt cryptocurrency lending platform.[2][3]

In the early 1990s, Mashinsky founded VoiceSmart, one of the first firms to offer telecommunications switches to handle ordinary voice as well as Voice over IP call routing.[4] Mashinsky founded GroundLink in 2004 as a service to book an on-demand limousine and car services from a computer or smartphone.[5] He was also the founder of Q-Wireless, which later became part of Transit Wireless.[6] From 2014 to 2015, Mashinsky served as CEO of Novatel.[7]

Mashinsky is the defendant in a civil lawsuit brought in January 2023 by the Attorney General of New York, who accuses him of committing securities fraud during his time as Celsius CEO.[8] On July 13, 2023, the Securities and Exchange Commission charged Mashinsky and Celsius with violating federal security laws.[9] On the same day, he was indicted and arrested by federal authorities in the Southern District of New York for alleged fraud and market manipulation.[10][11]

Early life

Mashinsky was born in 1965 in the Soviet Union to a Jewish family. His family obtained permission to leave the country in the 1970s[12] and later moved to Israel.[5][13] From an early age, he was a tinkerer, like his father, and would tap into and use public phone lines in Israel.[13] As a teenager, he bought confiscated goods from Ben Gurion Airport at auction and resold them for a profit.[14]

Mashinsky attended a few different universities where he majored in electrical engineering but did not graduate. He served in the Israeli Army, where he trained as a pilot and served in the Golani Brigade, from 1984 to 1987.[14][13] In 1988, he left Israel and moved to the United States.[15][5][14]

Career

Mashinsky has worked in a variety of different industries, often focusing on popular technologies. The Wall Street Journal described him in 2022 as "a brash, confident serial entrepreneur with a constant stream of big ideas". On several occasions, Mashinsky has left his companies after a period of conflict or tension.[12]

After relocating to New York City, Mashinsky ran a business trading contracts for delivery of chemicals such as urea, gold, and sodium cyanide. However, after the Tiananmen Square protests of 1989, the business slowed as exports of sodium cyanide from China fizzled. Mashinsky then worked at A+ Systems, a computer-based voicemail software company for phone carriers.[13]

Telecommunications companies

Mashinsky was an early developer of voice over Internet Protocol (VOIP).[16][17] In the early 1990s, he founded VoiceSmart, one of the first companies to offer computer-based VOIP phone service.[15] By 1993, Mashinsky had realized the potential for a commodity market for international telephone capacity.[18] So, in 1996, Mashinsky founded Arbinet, a marketplace for VoIP telephone service.[15][5] The platform was one of the first to allow telecommunication companies to trade minutes.[19] In November 1997, Arbinet began offering a similar service for data connectivity, allowing the more than 400 T1 lines connected to its New York hub to exchange their unused bandwidth.[20]

In 2005, he sold his stake in Arbinet and used part of the profits from the sale to start GroundLink.[5] The company allowed people to book limousine and car service from a smartphone or computer.[21] Mashinsky was inspired to start the company after a car he had reserved for himself and his wife failed to pick them up, along with a business associate he was trying to impress, from the airport.[5] In 2010, Mashinsky organized a joint venture between GroundLink and several limousine and car service companies. These companies with LimoRes Car & Limo Service, a company Mashinsky also founded, installed free Wi-Fi service funded solely by sales of advertising.[22] He also partnered with Gogo Inflight Internet to offer the free service on US flights.[6]

Mashinsky's company Q-Wireless is one of the four companies that made up Transit Wireless, a joint venture to install wireless cellphone and free Wi-Fi internet service in the New York City Subway system.[23] It took Mashinsky three years to convince the MTA to determine if there was a demand for cell phone service inside the subway system, and two more years for the authority to request a proposal.[17] By 2010,[23] his company had received a contract to install the service at 277 below-ground subway stations in New York City.[17]

In April 2014, Mashinsky was named to the board of directors of Novatel, a provider of Wi-Fi hotspot products.[24] He was appointed CEO in June of that year.[25][26] In October 2015, Mashinsky left his position at Novatel after a year and a half as CEO of the company.[27] In a 2018 deposition, Mashinsky said that he was terminated from his post because he refused to move from New York to Novatel's San Diego headquarters.[12]

RTX, a London-based financial technology firm in the telecom industry, hired Mashinsky as Global CEO in September 2016.[28] After six months in the role, following a dispute with management, Mashinsky left the company, according to his 2018 deposition.[12]

Celsius Network

In 2017, Mashinsky founded Celsius Network, a borrowing and lending platform for digital assets like Bitcoin, Ethereum and other cryptocurrencies.[29][30] It encouraged its customers to "unbank" themselves and offered interest rates as high as 18.6 per cent on cryptocurrency deposits.[31]

As CEO, he hosted "Ask Mashinsky Anything", a weekly YouTube livestream in which he answered questions about Celsius. He became known for wearing T-shirts reading "Banks are not your friends", for his critical comments about unsuccessful businesses (including his own), and for publicity stunts such as an attempt to vandalize a branch of Chase Bank.[32][33]

In January 2022, Mashinsky took control of Celsius's trading strategy. Some insiders reported that he personally directed large individual cryptocurrency trades, overruling executives with significant financial experience.[34]

Mashinsky withdrew $10 million from Celsius in May 2022. The withdrawals came as customers were withdrawing assets in large quantities while the company was nearing bankruptcy, according to a report in October 2022. A spokesperson for Mashinsky told the Financial Times that the funds were used for tax payments and estate planning.[35] In total, Arkham Intelligence estimates that Mashinsky sold $44 million worth of CEL tokens through exchanges.[32]

On July 13, 2022, one month after it paused customer withdrawals, Celsius filed for Chapter 11 bankruptcy.[36] Mashinsky said that "the Company made what, in hindsight, proved to be certain poor asset deployment decisions."[37][38]

Mashinsky resigned as Celsius CEO on September 27, 2022. Chris Ferraro, the former CFO of Celsius, was appointed to replace him as interim CEO. The Unsecured Creditors Committee, an organization of depositors, described the executive change as "a positive step" towards resolving the cases against Celsius.[39]

Recognition

Mashinsky was listed in Business Insider's "The Silicon Alley 100: New York’s Coolest Tech People" in 2010.[40] As head of LimoRes, Mashinsky was selected as one of Crain's Top Entrepreneurs in 2010.[41] His VoIP intellectual property was recognized by Internet Telephony magazine in its list of Top 100 VoIP Communications.[42] He was awarded the Albert Einstein Technology Medal in 2000, and the Technology Foresight Award for Innovation in 1999.[43][verification needed] He won the Catalyst of Innovation Award from TechUnited:NJ on May 25, 2022.[44]

Criticism

On January 31, 2023, Shoba Pillay, a court-appointed examiner and a former federal prosecutor, filed a 470-page report on Celsius (with an additional 200 pages of appendices) with the bankruptcy court. Pillay's report, as interpreted by Molly White, described "blatant fraud" by Mashinsky during his time as CEO. The report was particularly critical of the weekly "Ask Mashinsky Anything" livestreams, which were later edited and published as videos on demand:[45]

As described by the examiner, Mashinsky routinely knowingly and overtly lied to customers in these videos, to a point where the company instituted a whole process to remove false or substantially misleading statements made in the live videos before republishing the recordings. The company made no attempt to inform their customers of the lies or the retractions, and in fact employees repeatedly expressed concern internally that if they made too many edits, customers or other viewers of the video who had watched live might notice the difference.

— Molly White

The Pillay report also noted that Mashinsky had not personally read Celsius's terms of use, and had made many public statements that contradicted the terms. Mashinsky repeatedly claimed that Celsius's CEL token was "registered" with the SEC, when it was not. The report described Mashinsky as personally intervening in key decisions such as Celsius's reward amounts, and it said that he personally benefited from selling CEL tokens, whose value Celsius pumped at his direction.[45] Although Mashinsky told customers that the CEL token's value reflected the business's value, the Pillay report quoted internal conversations between employees who said that CEL should be valued at $0.[46]

On January 5, 2023, the Attorney General of New York filed a civil lawsuit against Mashinsky, accusing him of violating the state's Martin Act by committing securities fraud. Letitia James's office seeks a fine against Mashinsky, monetary damages, and a ban that would prevent him from leading a company or working in the securities industry in the state of New York.[8][47]

On July 13, 2023, Celsius Network agreed to a $4.7 billion settlement with the Federal Trade Commission (FTC). On the same day, Mashinsky was arrested and charged with committing securities, commodities, and wire fraud, and with committing securities manipulation and fraud charges. If they are convicted, Mashinsky and a co-defendant, Roni Cohen-Pavon, face decades in prison. Mashinsky pleaded not guilty to the charges.[48]

Personal life

Mashinsky lives in New York City with his wife, Krissy Mashinsky (Kristine Meehan) , and six children.[33] Krissy runs the online retailer usastrong.IO, which attracted controversy for selling shirts reading "Unbankrupt Yourself", a play on Celsius Network’s slogan "Unbank Yourself", after Celsius went bankrupt.[49]

References

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