Judge jails former crypto mogul as victims recount devastating losses
Alex Mashinsky, the former CEO of collapsed crypto lender Celsius Network, has been sentenced to 12 years in prison after pleading guilty to defrauding investors in a multibillion-dollar scheme that left thousands of everyday savers in financial ruin.
Appearing in court in New York on Thursday, Mashinsky faced judgment over the downfall of Celsius, once hailed as a revolutionary platform that promised yields of up to 18.6% on cryptocurrency deposits. At its peak, the company managed more than $20 billion in assets from hundreds of thousands of investors.
Federal prosecutors had pressed for a minimum 20-year sentence, citing the immense scale of the damage caused. They alleged that Mashinsky, a self-styled crypto visionary, misled customers into entrusting their savings with Celsius, only for the platform to implode when digital markets crashed in 2022.
“Alex Mashinsky has robbed my family of its best opportunity to be self-sufficient after I’m gone. Losing my [bitcoin] to this conman will always haunt me,” one victim, Chris Allen, wrote in a statement submitted to the court.
In a memorandum filed in April, the U.S. attorney’s office for the Southern District of New York detailed the extent of the fraud, accusing Mashinsky of making reckless and undisclosed bets on crypto markets and secretly inflating the price of Celsius’s own token, CEL, for personal gain. Prosecutors said he made $48 million selling CEL, using the proceeds to fund a lavish lifestyle, including properties in Manhattan, the Hamptons, and Texas.
Jay Clayton, U.S. attorney for the Southern District of New York, said in a statement, “The case for digital assets was strong. But, it is not a license to deceive. The rules against fraud still apply, and the SDNY will hold those who flout them accountable for their crimes.”
Mashinsky was arrested in July 2023, a year after Celsius filed for bankruptcy protection. He pleaded guilty in December to multiple counts of commodities fraud and market manipulation.
His legal team had asked for a sentence of no more than 366 days, claiming he felt deep remorse and that the government’s push for 20 years amounted to a “death-in-prison sentence” for the 59-year-old. Following the verdict, a lawyer for Mashinsky said, “We are pleased that the judge went well below the government’s brutal recommendation. But a day in prison is too much.”
The sentencing comes as the Justice Department shifts its enforcement priorities under President Trump’s administration. In a policy update last month, Deputy Attorney General Todd Blanche stated the department would reduce its focus on criminal prosecutions of crypto firms but continue targeting “individuals who victimize digital asset investors.”
Mashinsky, once a champion of financial decentralisation, urged people to “unbank” themselves and join the Celsius revolution. But behind the scenes, prosecutors revealed, he presided over a firm that ignored internal risk limits, made unsecured loans to crypto traders, and misled the public about the security of customer funds.
Celsius suspended withdrawals in June 2022, days after Mashinsky publicly assured users their assets were safe. The collapse triggered one of the earliest and most dramatic failures in the crypto market downturn.
Although former customers have begun receiving partial repayments through a court-approved restructuring plan, many remain far from whole. Mashinsky, once a poster figure for crypto innovation, now becomes a cautionary tale of hubris, deception, and the price of unchecked ambition.
