Justice Department Seeks 20 Years in Prison for Celsius Founder Alex Mashinsky
Federal prosecutors have described Mashinsky as the architect of a “year-long campaign of deception and abuse” that cost clients billions of dollars in losses.
Sam Reynolds | Edited by Sheldon Rebeck April 29, 2025, 7:43 AM
Important facts:
- Former Celsius Network CEO Alex Mashinsky faces 20 years in prison for orchestrating a fraudulent scheme that cost customers nearly $7 billion in losses.
- Mashinsky admitted his guilt in intentionally misleading clients about the security of their deposits and manipulating the CEL token for his own interests.
- Sentencing is scheduled for May 8, with prosecutors emphasizing the need for strong penalties to deter similar cryptocurrency crimes.
Alex Mashinsky, the founder and former CEO of bankrupt crypto lender Celsius Network, could spend the next 20 years behind bars if the U.S. Justice Department's request for sentencing is granted.
In a memo filed Monday night, the Justice Department urged the court to sentence him to 20 years in prison, calling his crimes a “willful, calculated” fraud that caused customers losses of about $7 billion and left thousands of people destitute.
Mashinsky, who pleaded guilty in December to misrepresenting the security of customer deposits and manipulating CEL tokens, “refuses to accept responsibility” for his actions and continues to shift blame to regulators, market conditions and even his victims, prosecutors said.
“Mashinsky's crimes were not the result of negligence, naivety or unfortunate circumstances,” they said. “They were the result of deliberate, calculated decisions to lie, cheat and steal for personal gain.”
At its peak in 2021, Celsius managed more than $20 billion in client crypto assets. Mashinsky actively promoted the platform as a safe alternative to banks, promising high returns and low risks.
Prosecutors said those promises were false: Celsius made unsecured loans, engaged in risky transactions, and secretly used customer assets to manipulate the price of its CEL token, while publicly assuring customers that their funds were safe.
Mashinsky personally sold more than $48 million worth of CEL tokens at inflated prices, even though he claimed to be “HODLing” with clients, prosecutors said. When Celsius went bankrupt in July 2022, about $4.7 billion in client funds were locked up.
The bankruptcy left customers with a deficit of more than $1 billion. Given current cryptocurrency prices following the 2024 Trump Trade rally, prosecutors estimate the total losses are closer to $7 billion.
Prosecutors warned that any punishment short of a lengthy prison term would fail to reflect the full gravity of Mashinsky's actions, undermine respect for the law and send the wrong message to other cryptocurrency executives seeking to enrich themselves at the expense of their clients.
Judge John G. Koeltl will sentence Mashinsky on May 8.
