Alex Mashinsky, the founder of the cryptocurrency platform Celsius, has been sentenced to 12 years in prison for large-scale fraud that resulted in hundreds of thousands of investors losing over $5 billion. The sentence was handed down by federal judge John Koeltl in the Southern District of New York. Prosecutors had previously requested a 20-year prison term for Mashinsky, describing him as “unrepentant” and accusing him of a “years-long campaign of lies and self-enrichment.”
This is reported by Finway
“The arguments in favor of tokenization and digital assets are compelling, but that is not a license to deceive. The rules against fraud remain in effect,” emphasized federal prosecutor Jay Clayton.
According to the ruling, Celsius positioned itself as a safe alternative to banks, offering high interest rates for cryptocurrency storage. The company gained popularity through Mashinsky’s appearances on YouTube and social media, and at its peak held $25 billion in assets.
However, in June 2022, under the pressure of the “crypto winter,” Celsius suspended withdrawals. A month later, the company filed for bankruptcy, blocking customers’ access to $5 billion in crypto assets. According to prosecutors, prior to this, Mashinsky managed to withdraw $10 million, and approximately $3 billion has been recovered so far.
In December 2024, Mashinsky pleaded guilty. He admitted to spreading false information about the company’s financial condition in his “Ask Mashinsky Anything” videos and manipulating the market by artificially inflating the value of the CEL token, from which he earned about $48 million.
“All my actions were aimed at protecting the community, and I failed. My false statements were inexcusable,” Mashinsky said in court.
His lawyers requested a sentence of just over a year, arguing that he “never intended to deceive anyone” and was merely a victim of the market crisis. Five victims testified in court, including Hollis Waite, who lost a significant portion of his savings and can no longer afford to pay for his daughters’ education.
“This case is bigger than just Alex Mashinsky. It should serve as a warning to other white-collar criminals,” Waite said.
Additionally, the court received over 200 letters from affected clients, most of whom demanded strict punishment. It is worth noting that Mashinsky could have faced up to 115 years in prison for the cumulative charges.