Celsius’ Alex Mashinsky Dodges Maximum Term, Gets 12 Years Despite Prosecutors’ 20-Year Plea

Key Takeaways

• Former Celsius CEO Alexander Mashinsky got a 12-year sentence for fraud and market manipulation.
• Prosecutors had previously requested a harsher 20-year sentence for Mashinsky, who pleaded guilty.
• Victim statements reveal a deep financial and emotional toll, with calls for a lifelong sentence.

Once seen as a crypto pioneer, Alex Mashinsky now joins the ranks of disgraced industry executives.

The former Celsius CEO was imprisoned after pleading guilty to fraud and market manipulation tied to the platform’s 2022 collapse.

Prosecutors accused Mashinsky of orchestrating a “deliberate and calculated” scheme to mislead customers, inflate Celsius’s native token using user funds, and paint a false picture of the platform’s safety, ultimately costing investors billions.

Mashinsky Sentenced to 12 Years in Celsius Fraud Case

Alexander Mashinsky, the former CEO of Celsius Network, was sentenced Thursday to 12 years in prison for commodities fraud and manipulating the company’s native token.

Mashinsky admitted to misleading investors about the safety and profitability of Celsius while quietly cashing out tens of millions in personal holdings.

His 2023 arrest came alongside a $4.7 billion settlement with the Federal Trade Commission (FTC), one of the largest in U.S. history, still pending customer reimbursements in bankruptcy proceedings.

Prosecutors had pushed for a 20-year term, describing Mashinsky’s actions as part of a “deliberate and calculated” scheme that cost users billions. But Judge John G. Koeltl opted for a lighter sentence.

In addition to prison time, Mashinsky will serve three years of supervised release, pay a $50,000 fine, and forfeit over $48 million.

His sentencing took place in Manhattan’s Southern District, the same courtroom that has become a hub for crypto crime, including the trials of Sam Bankman-Fried and other fallen crypto moguls.

“America’s Investors Deserve Better,” Says U.S. Attorney

Reacting to the sentencing , U.S. Attorney for the Southern District of New York Jay Clayton said Mashinsky “targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank.”

“In fact, he used those assets to place risky bets and to line his own pockets,” Clayton continued. “Mashinsky made tens of millions of dollars while his customers lost billions. America’s investors deserve better.”

While acknowledging the potential of tokenization and digital assets, Clayton made it clear that innovation doesn’t excuse deception. “The rules against fraud still apply, and the SDNY will hold those who flout them accountable for their crimes,” he said.

Celsius Victim Testimonies Reveal Devastation

Ahead of the May 8 sentencing in Manhattan federal court, the U.S. Department of Justice (DOJ) submitted more than 200 victim impact statements.

The letters, sent by investors from Australia to Copenhagen to New York, paint a grim picture of financial devastation, mental health breakdowns, and even suicides.

One investor, Brandon Lawrence, who lost 1.5 BTC, wrote:

“He has devastated numerous lives, and there are those who have taken their own lives because of him. He should face consequences akin to Bernie Madoff.”

Some investors, like retired teacher Stephen Levenberg, lost hundreds of thousands after entrusting Mashinsky with their savings.

Despite his losses, Levenberg suggested a lighter sentence if restitution occurs. “Three years—if he returns everything and sells all his homes.”

Others were less forgiving. “Throw the book at this desperate, scumbag crypto scammer,“ wrote actor Cheyenne Adamson, who lost $150,000.

A Collapse Measured in Billions

At its peak in 2021, Celsius managed over $20 billion in crypto. It used to market itself as a safer, higher-yield alternative to traditional finance.

However, behind the scenes, prosecutors say the company took on unbacked loans, made risky bets, and used customer funds to inflate the CEL token, while continuing to promote the platform in online videos.

When Celsius collapsed in July 2022, it froze $4.7 billion in user funds.

After the crypto market’s rebound, prosecutors now estimate the real losses at around $7 billion.

Mashinsky agreed to forfeit $48 million as part of his plea deal in December. Then, he pleaded guilty to two counts of fraud.

His lawyers are asking for a sentence of 366 days. Probation officials have recommended 15 years. The DOJ wants 20.

Prosecutors argued that anything less than a lengthy prison term would set a dangerous precedent for other crypto executives.