Celsius Founder Alex Mashinsky Sentenced to 12 Years for Crypto Fraud

Alex Mashinsky, former CEO of collapsed crypto lender Celsius Network, has been sentenced to 12 years in prison for orchestrating a massive fraud scheme that led to billions in losses for retail investors. U.S. District Judge John Koeltl described Mashinsky’s actions as “extremely serious,” highlighting his repeated lies about Celsius’ regulatory status, risk exposure, and manipulation of its native CEL token. Prosecutors say he pocketed over $48 million while falsely assuring users their assets were safer than in banks.

The sentence—120 months plus 144 months to be served concurrently—landed between the one-year term his defense requested and the 20 years prosecutors sought. Mashinsky also agreed to forfeit $48 million and real estate assets. Celsius filed for bankruptcy in 2022, revealing a $1.2 billion hole in its balance sheet, with more than 100,000 creditors claiming $4.7 billion in losses—now estimated at $7 billion based on current prices.

Victims testified to the emotional and financial devastation, including ruined college plans and mental health struggles. One victim pointedly criticized Mashinsky’s post-collapse behavior, including his wife’s sale of “Unbankrupt Yourself” merchandise.

Despite his tearful courtroom apology, Mashinsky maintained a deflective tone, claiming to bear the burden of Celsius’ failure alone. His lawyers argued he lacked malicious intent, citing his past military service and community work. However, Mashinsky showed limited accountability, even expressing surprise at the sentence.

He is scheduled to report to prison in September and will serve time at FCI Otisville, a medium-security facility in New York. The case serves as a stark reminder that fraud in the digital asset space carries serious consequences. Mashinsky’s sentencing marks a milestone in crypto regulation enforcement as prosecutors reaffirm that digital innovation does not exempt individuals from accountability.