Alex Mashinsky, the founder of the cryptocurrency platform Celsius, has been sentenced to 12 years in prison for large-scale fraud that resulted in the loss of over $5 billion for hundreds of thousands of investors. The sentence was announced by federal judge John Keelt in the Southern District of New York. The prosecution had previously sought a 20-year prison term, describing Mashinsky as “unrepentant” and accusing him of a “years-long campaign of lies and self-enrichment.”
This is reported by Бізнес • Медіа
Crimes and Consequences
“The arguments in favor of tokenization and digital assets are compelling, but that does not give a license to deceive. The rules against fraud remain in effect,” emphasized federal prosecutor Jay Clayton.
Celsius positioned itself as a safe alternative to banks, offering high interest rates for cryptocurrency storage. Thanks to Mashinsky’s active promotion on YouTube and social media, the company peaked at $25 billion in assets. However, in June 2022, under the pressure of the “crypto winter,” Celsius suspended withdrawals, and a month later filed for bankruptcy, blocking customer access to $5 billion in crypto assets.
Before the bankruptcy began, Mashinsky managed to withdraw $10 million. To date, approximately $3 billion has been recovered. In December 2024, he pleaded guilty, admitting that he spread false information about the company’s financial condition in his “Ask Mashinsky Anything” videos and manipulated the market by artificially inflating the value of the CEL token, from which he earned about $48 million.
“All my actions were aimed at protecting the community, and I failed. My false statements were inexcusable,” Mashinsky stated in court.
Mashinsky’s lawyers requested a shorter prison term, arguing that he “did not intend to deceive anyone” and was merely a victim of the market crisis. Five victims testified in court, including Hollis Wait, who lost a significant portion of his savings and can no longer afford to pay for his daughters’ education.
“This case is bigger than just Alex Mashinsky. It should serve as a warning to other white-collar criminals,” Wait said.
The court also received over 200 letters from affected clients, most of whom demanded strict punishment. It should be noted that Mashinsky could have faced up to 115 years in prison on the cumulative charges.