Former Celsius CEO Alex Mashinsky Handed 12-Year Prison Sentence for Multi-Billion-Dollar Crypto ...

Alex Mashinsky, founder of the collapsed crypto lender Celsius Network, was slapped with a 12-year prison sentence on May 8 for crypto-related fraud.

Mashinsky’s legal team sought a light prison sentence of one year and a day. They pointed to his clean record before the Celsius implosion, along with his military service and guilty plea. However, US prosecutors were less inclined to leniency.

Mashinsky Sentenced To 12 Years In Prison

Alex Mashinsky, 58, is set to spend 12 years in prison.

Judge John Koeltl of the Southern District of New York (SDNY) handed down the sentence, saying the 12 years, comprising a 120-month sentence to be served concurrently with a separate 144-month sentence for the two charges Mashinsky pled guilty to, reflected Mashinsky’s “extremely serious” crimes.

Mashinsky pleaded guilty to one count of committing commodities fraud and one count of committing securities fraud in December 2024. He was initially indicted on seven charges, including two counts of wire fraud and a fraudulent scheme to manipulate the price of Celsius’ native token, CEL, for his own financial gain.

As ZyCrypto reported, federal prosecutors had initially recommended the former crypto mogul serve 20 years in prison. Prosecutors had said that Mashinsky had “orchestrated one of the biggest frauds in the crypto industry.” Meanwhile, his defense team had highlighted Mashinsky’s character, pointing to his long career in business, devotion to family, and service with the Israeli Army.

In a letter to Judge Koeltl dated May 5, Mashinsky’s legal team said a prison sentence exceeding one year would amount to a “death-in-prison” punishment. They argued that the U.S. government’s justification for its sentencing recommendations served to “demonize [Mashinsky’s] intentions and motivations, his character and personality, and attribute his wrongdoing to a sadistic disposition.”

Mashinsky will also relinquish $48 million and several real estate properties.

“No matter what the sentence, the sentence will not cure the monetary or psychological harm caused to the victims,” Koeltl asserted.

The Rise And Fall Of Mashinsky

Before Celsius went under in 2022, the crypto fraudster repeatedly lied to customers about the safety of their money. He falsely proclaimed that Celsius had the regulatory green light and claimed that the platform did not make uncollateralized loans when, in fact, it did.

“Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets,” U.S. Attorney Jay Clayton said in a statement. “In the end, Mashinsky made tens of millions of dollars while his customers lost billions. America’s investors deserve better. ”

Mashinsky’s bad leadership and greed forced Celsius into bankruptcy, leaving a huge $1.2 billion hole in the firm’s balance sheet — which, according to prosecutors, is equivalent to $7 billion at today’s market prices.

Judge Koeltl ordered Mashinsky to self-report to prison to start his sentence by September 12. He will be 70 years old upon release if he serves the entirety of his sentence