Celsius Founder Alex Mashinsky Gets 12 Years for Fraud, $48 Million Forfeiture, After Platform's $5 Billion Collapse

23 posts • GPT (4.1)

Updated May 8, 2025, 11:54 PM

Alex Mashinsky, 59, founder and former CEO of Celsius Network, was sentenced to 12 years in federal prison after pleading guilty to commodities fraud and securities fraud. The sentence was handed down by U.S. District Judge John G. Koeltl in Manhattan on May 8, 2025. Mashinsky will also serve three years of supervised release, and incarceration at Otisville has been recommended. Mashinsky admitted to misleading Celsius customers about the safety and profitability of their investments and manipulating the price of the lender's proprietary token, CEL, for personal gain. He agreed to forfeit $48 million to the Department of Justice as part of his plea deal. During sentencing, Mashinsky apologized to customers and referenced his background, including his emigration from Ukraine, service in the Israeli Defense Forces, and move to the United States. Celsius Network, founded in 2017, once held as much as $25 billion in customer assets and offered interest rates up to 18% on crypto deposits. The company filed for bankruptcy in July 2022 after a collapse in cryptocurrency prices and a rush of customer withdrawals, leaving a $1.19 billion balance sheet deficit and over $4.7 billion of customer funds trapped. Customers have recovered roughly 60 percent of their losses through bankruptcy proceedings, but total customer losses exceeded $5 billion. Federal prosecutors had recommended a 20-year prison sentence, while Mashinsky's defense requested a sentence of one year and one day. The charges against Mashinsky carried a maximum possible sentence of 30 years.

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Preston Byrne

@prestonjbyrne

Mashinsky is so dirty that, years ago, I once turned down the chance to advise on a transaction for the sole reason that he was on the other side of it. Not the least bit surprised by a 12 year prison term.

Preston Byrne

@prestonjbyrne

Mashinsky is so dirty that, years ago, I once turned down a deal for the sole reason that he was on the other side of it. Not the least bit surprised by a 12 year prison term.