In the aftermath of crypto’s series of spectacular crashes, 2023 seems to be the year of retribution. Watching heroes become villains is the new industry blood sport, and the number of crypto leaders who are now facing jail time—and who once commanded Messiah-like presences on Twitter and Discord—is growing bigger by the month.

On Thursday, Alex Mashinsky, founder of the now-bankrupt crypto lender Celsius, was arrested and charged with fraud by the Securities and Exchange Commission (SEC). Celsius was chiefly responsible for last year’s second major crypto market crash—if you were counting—in June 2022. Before its collapse, Celsius had promised investors eye-popping double-digit returns and collected tens of billions of dollars in deposits. Mashinsky, a charismatic salesman, had starred in YouTube videos hyping Celsius’s revolutionary pitch to the rest of the cryptoverse.

His downfall follows that of Do Kwon, the founder of the Terra-Luna cryptocurrency ecosystem—responsible for the first major crypto crash last year (in May 2022). After a nearly year-long manhunt, during which Kwon’s home country of South Korea issued an Interpol Red Notice, Kwon was arrested in Montenegro and charged with multiple counts of conspiracy and wire fraud. Prior to that, he was known to pick fights on Twitter and rage-bait critics with ad-hominem attacks.

But certainly the most infamous is Sam Bankman-Fried, the disgraced FTX founder and effective altruism crusader who was once considered crypto’s most savior-like figure. After his Bahamas arrest, Bankman-Fried was released on a $250 million bond and is living at his parents’ home in California while awaiting his fate on charges that carry a punishment of up to 115 years in prison.

Then there’s Anatoly Legkodymov, the head of Hong Kong-registered crypto exchange Bitzlato, who was arrested in January for allegedly laundering $700 million for the Hydra dark web market.

Also in the limelight recently is Jesse Powell. It was recently reported that the loose-cannon founder of crypto exchange Kraken, whose volatile Twitter posts mirrored the turbulent and toxic culture he was accused of creating at his own company—had his home raided by the Federal Bureau of Investigation (FBI). In this instance, the search had nothing to do with crypto. Instead, authorities were reportedly probing claims that Powell had hacked and cyberstalked a nonprofit arts group that he also founded. He has yet to be charged with any crimes.


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