Celsius Founder Alex Mashinsky Sentenced to 12 Years in Prison for Fraud
Celsius founder Alex Mashinsky gets 12 years in prison for fraud
Last December, Mashinsky pleaded guilty to securities and commodities fraud.
Author: Cheyenne Ligon | Edited by: Nikhilesh De Updated: May 8, 2025 8:48 PM Published: May 8, 2025 7:42 PM
NEW YORK, N.Y. — Alex Mashinsky, the founder and former CEO of the failed crypto lending platform Celsius Network, was sentenced Thursday to 12 years in prison for fraud.
Judge John Koeltl of the Southern District of New York (SDNY) imposed the sentence, specifying that the 12 years be a combination of a 120-month term to be served concurrently and a separate 144-month term for the two charges Mashinsky pleaded guilty to. The judge noted that this reflected Mashinsky’s “extremely serious” crimes. The sentence fell between the one year and a day sought by the defense and the 20 years proposed by prosecutors. He also agreed to forfeit $48 million and several properties.
“Whatever the sentence, it will not be able to compensate for the material or psychological damage caused to the victims,” Koeltl said.
Before Celsius collapsed in 2022, Mashinsky repeatedly misled investors about the safety of their funds. He falsely claimed Celsius had regulatory approval, insisted the platform did not issue unsecured loans when it did, and deceived investors about the sale of his CEL tokens by manipulating the price for his own benefit — netting more than $48 million in profits from CEL alone, prosecutors said. Mashinsky’s mismanagement and fraudulent actions led to Celsius’s bankruptcy, leaving a gaping $1.2 billion hole in the company’s balance sheet — equivalent to $7 billion at today’s prices, prosecutors said.
When Celsius actually went bankrupt, more than 100,000 creditors reported losing a total of $4.7 billion, according to initial bankruptcy filings.
“Alexander Mashinsky targeted retail investors with the promise that he would protect their ‘digital assets’ better than a bank, when in reality he used those assets to make risky bets and enrich himself,” said U.S. Attorney Jay Clayton. “Ultimately, Mashinsky made tens of millions of dollars while his clients lost billions. American investors deserve better. The case for tokenization and the use of digital assets is strong, but it is not a license to commit fraud. Fraud laws still apply, and the SDNY will hold those who ignore them accountable.”
In their preliminary filings and in their testimony Thursday, Mashinsky and his lawyers sought to minimize the former CEO’s role in the fraud. His defense attorneys told the court that Mashinsky “doesn’t have an evil bone in his body” and that the government’s attempt to portray him as the architect of the fraudulent scheme was a “hoax.”
Mashinsky broke down in tears as his attorney, Mark Mukasey, told the court about his personal attributes — including his service in the Israeli army, his alleged track record of employing homeless people at his various companies and, somewhat confusingly, his continued work on a non-fiction book about gravity after his arrest — that he urged the judge to consider as mitigating factors in Mashinsky’s sentence. As Mashinsky himself spoke to the judge, he broke down in tears at times.
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