No Rules, pt.1 : Pulling the Rug
No Rules, pt.1 : Pulling the Rug
MicroMoney, Sirin Labs, and the origins of Celsius Network
“There are no rules in this business.”- Alex Mashinsky*
Around the same time Alex Mashinsky got his start with Celsius Network, he served as an advisor to two other cryptocurrency-related firms. These two firms, MicroMoney ($AMM token) and Sirin Labs ($SRN token), were both, in crypto-parlance, “rug pulls.” Each offered an “initial coin offering” that was supposedly designed to generate funds for business development. In practice, the price of both tokens skyrocketed and then crashed shortly after launch. Neither business appears to have delivered on any of the promises made. In the case of Sirin Labs, lawsuits and criminal charges have been pressed against the founders and key figures within the company.
While we have previously documented Mr. Mashinsky’s role in these two failures, we were missing one crucial piece of evidence: The blockchain trail demonstrating Mr. Mashinsky’s direct participation in these rugpulls. After some digging, we believe we have identified at least one wallet controlled by Mr. Mashinsky that participated in both schemes.
Follow the Money
We traced the activity of a wallet that both we and others have demonstrated is controlled by Mr. Mashinsky. We found that this wallet (we will call it Mashinsky-3) was initially funded on 08/02/21 by 0xc33192 (Mashinsky-2). Mashinsky-2 had sold over 5.2 million Celsius tokens ($CEL) between August 2020 to August 2021. Incidentally, this number is close to our previous estimates of Mr. Mashinsky’s selling during that period. Only a few individuals have owned this much $CEL token, adding further evidence that this wallet is controlled by Mr. Mashinsky.
In turn, Mashinsky-2 was initially funded by 0x11729ac (Mashinsky-1). Mashinsky-2 also received over 5 million of its $CEL tokens directly from Mashinsky-1 over several transfers. We are confident that the Mashinsky-1 wallet belonged to a Celsius insider, as it received a transfer of 80,000,000 $CEL token in August of 2018; these tokens were then sent to the original Celsius Network treasury.
It turns out that Mashinsky-1 was our white whale wallet, as it had also handled significant amounts of both MicroMoney and Sirin Labs tokens.
MicroMoney
MicroMoney.io was marketed as a cryptocurrency lending platform that offered both interest-paying accounts and crypto loans, focusing on markets in southeast Asia. According to MicroMoney’s own blog, Mashinsky was an early investor who made a “generous contribution during our pre-sale.” He then joined the project as a formal advisor prior to their ICO.
Mashinsky has not hid this relationship. In fact, his venture capital firm Governing Dynamics continues to list MicroMoney among its successful investments:
The ties between Mashinsky and MicroMoney ran even deeper, as the CEO of MicroMoney was one of the original advisors to Celsius Network:
On 10/11/17, Mashinsky-1 received 1,020 $AMM from 0xdf935. This appears to be a MicroMoney insider contract that initially received 60,000,000 AMM from the “Astronaut Capital Deployer.” On 10/14/17, Mashinsky-1 received another 392,681 tokens from the same wallet. Mashinsky-1 received its final transfer of 72,495 $AMM on 12/26/17 from 0xb76766bebe95139e3d7d8d1fb74b03f38361ad0f, which appears to be a core $AMM wallet. Mashinsky-1 then proceeded to transfer all $AMM tokens out over a period of roughly two weeks, sending 303,000 to OKex and 172,500 to the Etherdelta exchange.
Now, we cannot say for sure when these tokens were sold, making it impossible to exactly calculate the proceeds. Also, we cannot be certain that this is the only wallet where Alex received $AMM tokens. However, if the tokens were sold on the same day as the transfer to the exchanges, we estimate that Mashinsky’s gross proceeds were ~$436,000.
Sirin Labs
Sirin Labs was the brainchild of the now infamous entrepreneur Moshe Hogeg, currently under indictment in Isreal for multiple counts of fraud and sexual misconduct. Sirin Labs promised to develop a blockchain-based smartphone (yeah) using proceeds from its ICO. This, of course, went nowhere, leading to multiple lawsuits.
Similar to his role at MicroMoney, Alex Mashinsky served as an advisor to the ill-fated venture. Moshe Hogeg simultaneously served as an early advisor to Celsius Network.
Like MicroMoney, Governing Dynamics lists Sirin Labs among its successful ventures, trumpeting the over $130 million raised in the ICO.
Mashinsky1 received a total of 2.25 million SRN from two addresses. The first, 0xdd9a1ad transferred 1.5 million SRN to Mashinsky1 on 12/27/17. This address had purchased a total of 14.99 million SRN on 12/12/17 for 14,999 Eth (worth $9.8 million at the time, or $0.65/token). It is unclear who this wallet belonged to, as it received all funds from an upstream wallet that was funded from a number of different exchanges.
Mashinsky1 then transferred the $SRN tokens out in batches of 100k-200k at a time to an intermediate wallet, 0xf0c06b. These transfers took place on 12/27/17, 12/28/17, 12/30/17, 12/31/17, 1/2/18, 1/4/18, 1/6/18, and 1/8/18. The intermediate wallet sent the tokens to Liqui.io, a now-defunct Ukrainian crypto exchange that was one of the first to enable $SRN token sales. Per CoinGecko, $SRN sales began on 12/31/17 at around $1/token. By 1/8/18, the price had risen to $2.25/token.
After sending all of the initial 1.5 million $SRN out, Mashinsky1 then received 5 transfers of 150,000 $SRN from 0x59b681402 on 1/24/18, 2/25/18, 3/25/18, 4/25/18, and 5/27/18. This wallet appears to be owned by Sirin Labs, as it withdrew tens of thousands of Ether directly from the Sirin Labs multisig contract.
Each batch of 150k $SRN was sent to the same intermediary wallet and transferred to Liqui.io. Over this period, the token price maxed out at ~$3.25 on 1/23/18, then rapidly declined. By the time Mashinsky1 made its last transfer of $SRN, the price had crashed to $0.32.
Again, it is not possible to determine exactly how much was made on these sales. If the tokens were sold immediately on transfer to Liqui.io, we estimate the proceeds would have been around $2.8 million. Since we cannot attribute the upstream wallet that made the initial 1.5 mil $SRN transfer, we don’t know whether Mashinsky put up funds to purchase these tokens. The second set of 750,000 $SRN transferred from the insider wallet may have been a payout for being an advisor to the company, but this is speculation on our part.
*EDIT: Originally reported this quote as: “There are no rules in crypto.” This was inaccurate and has been corrected; Mr. Mashinsky was referring to crypto when he said “this business.”