Alex Mashinsky, founder and former CEO of Celsius Network, has received a 12-year prison sentence for crypto-related fraud.
A U.S. federal judge in Manhattan delivered the sentence on Thursday, May 8, 2025, following Mashinsky’s December 2024 guilty plea.
He admitted to multiple counts of securities and commodities fraud related to Celsius Network’s collapse in 2022.
Mashinsky misled investors about Celsius’ financial health and falsely promoted the safety of the company’s operations.
He also manipulated the price of Celsius’ proprietary cryptocurrency token, CEL, for personal and corporate gain.
Celsius was a major cryptocurrency lender that once claimed to hold over $25 billion in digital assets.
The platform promised users high interest rates and secure, low-risk savings options using crypto-based assets.
Celsius halted customer withdrawals in June 2022, then filed for bankruptcy in July, amid a wider crypto market crash.
Mashinsky’s deceptive practices contributed to massive losses for thousands of retail investors around the world.
Prosecutors claimed that Mashinsky personally earned over $48 million through dishonest and manipulative business tactics.
They described his fraud as calculated, deliberate, and particularly harmful to ordinary investors who trusted Celsius.
The Department of Justice requested a sentence of at least 20 years due to the scale of the fraud.
Judge John Koeltl ultimately imposed a 12-year prison term, calling it a serious punishment for financial misconduct.
Mashinsky’s sentence is among the harshest in the history of crypto-related white-collar crime.
Only FTX founder Sam Bankman-Fried received a longer sentence, serving 25 years for his own fraud scheme.
The Celsius case became symbolic of the dangers posed by unregulated crypto markets and deceptive leadership.
At its height, Celsius was seen as a trailblazer in the field of decentralized finance (DeFi).
The company attracted widespread investor interest with promises of innovative and high-yield crypto banking services.
Mashinsky gained attention as a charismatic crypto evangelist and industry disruptor during Celsius’ rise.
However, evidence showed he consistently lied about the company’s financial stability and investment strategy.
He concealed key risks and misrepresented Celsius’ ability to meet customer withdrawal demands.
The fraud unraveled quickly as investor trust declined and crypto values plummeted in mid-2022.
U.S. regulators intensified their scrutiny of crypto firms in response to Celsius’ collapse and related cases.
Authorities now view Celsius as a case study in regulatory failure and investor vulnerability.
Legal experts say Mashinsky’s sentence sets a precedent for future crypto crime prosecutions.
The judgment shows courts are taking digital asset fraud as seriously as traditional financial crimes.
Investor advocates have welcomed the sentence, calling it a long-overdue win for accountability in fintech.
Mashinsky will serve his time in federal prison, beginning later this year after processing.
His legal team has not yet commented on the possibility of an appeal.
The Celsius case remains a major turning point in the history of cryptocurrency regulation and enforcement.
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