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Alexander Mashinsky, the founder of Celsius, has been sentenced to 12 years in prison following his role in one of the largest crypto fraud cases in recent memory. The decision comes months after his guilty plea and years after Celsius collapsed, wiping out billions in customer assets.
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The former CEO was arrested in July 2023 after the U.S. Securities and Exchange Commission accused him of violating securities laws. According to the Department of Justice, Mashinsky misled users by claiming Celsius was a safe option for storing digital assets, while secretly using customer funds for high-risk bets and personal gain.
By December 2024, Mashinsky had admitted guilt. Prosecutors revealed that he had exaggerated the platform’s potential returns and misrepresented the risks involved. While customers lost billions, Mashinsky walked away with tens of millions before the platform ultimately collapsed.
Earlier this week, his lawyers requested just one year behind bars, citing mitigating factors. That request was denied. The U.S. Attorney’s Office confirmed yesterday that the court had handed down a 12-year prison term instead.
In a statement, U.S. Attorney Jay Clayton said, “Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets. In the end, Mashinsky made tens of millions of dollars while his customers lost billions.”
Clayton also addressed the broader implications for the crypto sector: “America’s investors deserve better. The case for tokenization and the use of digital assets is strong but it is not a license to deceive. The rules against fraud still apply, and the SDNY will hold those who flout them accountable for their crimes.”