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American Focus > Blog > Economy > Celsius founder Alex Mashinsky sentenced to 12 years in prison
Economy

Celsius founder Alex Mashinsky sentenced to 12 years in prison

Last updated: May 8, 2025 3:15 pm
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Celsius founder Alex Mashinsky sentenced to 12 years in prison
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Alex Mashinsky, the founder of the collapsed crypto lender Celsius Network, has been sentenced to 12 years in prison after admitting his involvement in a scheme to defraud customers and manipulate a token using customer funds.

In December, Mashinsky pleaded guilty to securities fraud and commodities fraud. Federal prosecutors in New York revealed that he enticed customers with promises of high returns on digital deposits, while deceiving them about Celsius’s operations and using their deposits to artificially inflate the price of its own crypto token, CEL.

At its peak, Celsius managed $25 billion in customer assets. However, the bank faced challenges due to volatility in crypto markets in 2022, leading to hundreds of thousands of clients being unable to retrieve their funds after withdrawals were halted.

District Judge John Koeltl of the Southern District of New York handed down the sentence to the 59-year-old Mashinsky on Thursday. As part of his plea agreement, Mashinsky agreed to forfeit more than $48 million, which represented his personal profits from the sale of CEL tokens before the crash. His bank accounts were frozen by US authorities following his indictment in 2023.

This sentencing coincides with US President Donald Trump’s efforts to engage with the crypto industry, including launching his own token and adopting a more lenient stance on enforcement and oversight of digital assets. In March, he pardoned the company behind the crypto exchange BitMEX, which had previously pleaded guilty to violating the Bank Secrecy Act regarding anti-money laundering controls. Furthermore, new policies from the Justice Department prevent the prosecution of crypto companies for their users’ actions.

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Jay Clayton, US attorney for the Southern District of New York, emphasized that while the case for tokenization and digital assets is compelling, it does not excuse deceptive practices. He stated, “The rules against fraud still apply, and the SDNY will hold those who flout them accountable for their crimes.”

Prosecutors had requested a 20-year prison term for Mashinsky, describing him as “a fraudster of epic proportions” who warranted a severe sentence. In December, Mashinsky acknowledged his wrongdoing in court and expressed his desire to make amends, taking full responsibility for his actions.

In a recent court filing, Mashinsky argued that his sentence should not exceed 366 days, criticizing the government for its harsh stance and portraying himself as a first-time, non-violent offender who has accepted responsibility for his actions. He expressed remorse for the pain he caused and the consequences of his misdeeds.

Mashinsky was arrested and charged in 2023, with his company filing for bankruptcy the previous year following a crypto market downturn. Prosecutors alleged that Celsius was misrepresented as a “modern-day bank” when in reality, it functioned as a risky investment fund. They also accused Celsius of using customers’ funds to manipulate the market for its CEL token, enabling the company to sell its holdings above their actual value.

TAGGED:AlexCelsiusfounderMashinskyprisonSentencedYears
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