Alex Mashinsky, the founder and former CEO of Celsius Network, has been sentenced to 12 years in prison for defrauding customers of the now-defunct crypto lending platform.
In December 2024, Mashinsky pleaded guilty to charges of securities and commodities fraud. The sentence was handed down by U.S. District Judge John Koeltl in Manhattan federal court on May 8, 2025.
Celsius Network, founded in 2017 by Mashinsky, was a crypto lending platform that allowed users to deposit digital assets in exchange for interest payments, promoting itself as a safer alternative to traditional banks. At its peak, Celsius held over $20 billion in assets.
However, in June 2022, the company froze customer withdrawals amid a downturn in the broader crypto market, eventually filing for bankruptcy the following month, revealing a $1 billion shortfall.
Mashinsky deceived his clients by portraying Celsius as a secure platform while hiding its mounting financial troubles. He falsely claimed that the Celsius token (CEL) was SEC-registered and manipulated its price, profiting $48 million. This left many investors unable to withdraw their funds, causing significant losses.
Mashinsky was arrested in July 2023 and charged with securities, commodities, and wire fraud, along with market manipulation. As part of his guilty plea, he agreed to forfeit the $48 million he had earned from his fraudulent activities. Prosecutors initially sought a 20-year sentence, describing Mashinsky as “unrepentant,” but the court ultimately imposed a 12-year term.
The Celsius collapse and Mashinsky’s fraudulent activities have highlighted the dangers of operating crypto platforms without proper regulation. This case has prompted renewed calls for increased oversight in the crypto industry, aiming to protect investors from similar scams in the future. Affected users are encouraged to consult legal professionals to explore recovery options.
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