Prosecutors from the United States Department of Justice have prepared a memorandum proposing to sentence former CEO of the cryptocurrency platform Celsius, Alex Mashinsky, to 20 years in prison. They hold him responsible for a massive fraud that caused losses to clients amounting to nearly $7 billion.
This is reported by Business • Media
Justification of Charges and Case Progress
In the document, prosecutors emphasized that Mashinsky’s actions were «deliberate and carefully planned». He himself admitted to misleading users about the safety of their deposits and manipulating the CEL token for personal gain — selling more than $48 million worth of tokens at inflated prices.
“These crimes are not the result of naivety or negligence. They are the result of deliberate deception for personal enrichment.”
According to the memorandum, in 2021 Celsius managed assets exceeding $20 billion. Mashinsky portrayed the platform as a safe alternative to banks, offering high returns with low risk. At the same time, the company issued unsecured loans, engaged in risky operations, and secretly used clients’ funds to manipulate the token’s price.
Events Leading to Bankruptcy and Court Rulings
According to investigations, prior to the bankruptcy announcement in 2022, Mashinsky withdrew $10 million from the company. It later emerged that two other top executives also withdrew funds from the platform’s accounts. Judge John J. Keltl has scheduled the sentencing for May 8, 2025. The prosecution insists that only strict punishment can deter other players in the crypto industry from similar crimes.
Mashinsky was arrested in July 2023 with a bail set at $40 million. In September, his assets were frozen by court order. He faced up to 115 years in prison for all charges.