Alex Mashinsky, the founder and former CEO of cryptocurrency lender Celsius Network, has been sentenced to 12 years in prison for defrauding hundreds of thousands of investors through deceptive claims and manipulative trading strategies.
The verdict was delivered on Thursday by US District Judge John Koeltl in a Manhattan courtroom. Mashinsky had pleaded guilty in December to charges stemming from the collapse of Celsius, once considered a pioneering platform in digital asset lending. Prosecutors had recommended a 20-year sentence, labelling him “unrepentant.”
Mashinsky’s sentencing marks another milestone in the US Justice Department’s sweeping crackdown on fraudulent activities within the crypto industry. Celsius’ implosion was part of the broader 2022 “crypto winter,” a market downturn that led to billions in lost value and triggered a string of high-profile bankruptcies, including that of FTX. FTX founder Sam Bankman-Fried is currently serving a 25-year sentence, while Terraform Labs founder Do Kwon awaits trial.
Mashinsky’s conviction arrives at a time of shifting federal priorities. Under the Trump administration, authorities have begun softening their stance on crypto-related investigations, reserving criminal prosecutions for cases where investors have been clearly defrauded.
“The case for tokenisation and the use of digital assets is strong, but it is not a license to deceive,” said Manhattan US Attorney Jay Clayton following the sentencing. “The rules against fraud still apply.”
Celsius once boasted $25 billion in assets and built its reputation on bold promises of high returns and safety, positioning itself as a better alternative to traditional banks. The platform’s visibility grew through Mashinsky’s charismatic YouTube presence and media appearances, particularly on his “Ask Mashinsky Anything” broadcasts.
However, when the crypto markets plunged in June 2022, Celsius froze customer withdrawals and filed for bankruptcy shortly thereafter. Prosecutors say that this left more than $5 billion of customer assets in limbo, although about $3 billion has since been recovered.
In his plea deal, Mashinsky admitted to making “inexcusable” false statements about the company’s financial condition and engaging in manipulative trading to artificially boost the price of Celsius’ native token, CEL. Authorities allege he earned approximately $42 million from these trades.
At sentencing, Mashinsky, visibly emotional, apologised to his former customers and acknowledged the consequences of his actions. “All my actions were meant to protect my community, and I failed,” he said.
His lawyers argued that he had been caught off guard by the market downturn and urged leniency, requesting a sentence of just over one year. They said he had been unfairly portrayed as “some sort of financial serial killer.”
Nevertheless, prosecutors pushed back, describing Mashinsky’s behaviour as a “years-long campaign of lies and self-dealing” that devastated thousands of investors. More than 200 victim impact letters were submitted to the court, many calling for a severe penalty.
“It wasn’t crypto that was a bad bet,” said Assistant US Attorney Allison Nichols. “It was Mashinsky.”
