Celsius Founder Alexander Mashinsky Sentenced to 12 Years for Fraud

NEW YORK, May 9, 2025 — Alexander Mashinsky, the founder and former chief executive of Celsius Network, was sentenced to 12 years in prison on Thursday after pleading guilty to securities and commodities fraud. U.S. District Judge John Koeltl imposed the sentence in Manhattan, marking one of the most significant criminal penalties related to the 2022 collapse of the cryptocurrency markets.

Federal prosecutors argued that the 59-year-old Mashinsky misled clients about the safety of their investments, inflating the perceived value of Celsius’ proprietary token, CEL. They sought a sentence of at least 20 years, deeming it necessary due to the billions in losses his actions caused numerous investors. Mashinsky, who requested a one-year term, claimed to feel remorse for his actions, lamenting the impact on his family and former customers.

U.S. Attorney Jay Clayton stated, “The case for tokenization and the use of digital assets is strong, but it is not a license to deceive.” He noted that Mashinsky had profited over $48 million from Celsius while customers suffered severe financial losses.

Established in 2017, Celsius marketed itself as a bank for cryptocurrency, promising high returns on deposits. However, by July 2022, it faced a $1.19 billion deficit and suspended withdrawals amid falling market prices and customer panic.

During his sentencing, Mashinsky expressed sorrow over his actions, recalling his family’s journey from Ukraine to Israel and subsequently to the U.S. He claimed his intentions were never to harm anyone, stating, “I never meant to hurt anybody here after all this country has done for me.”

Victims also spoke during the hearing. Cameron Crewes, representing a committee of affected customers, emphasized the tragic consequences of Mashinsky’s actions, stating that nearly 250 victims died before seeing any justice or compensation.

Prior to his sentencing, Mashinsky had pleaded guilty to deceiving customers by guaranteeing the safety of their investments while engaging in risky financial practices. As part of his plea agreement, he faces three years of supervised release and must forfeit $48.4 million.

This case is seen as part of a wider crackdown on fraudulent activities in the cryptocurrency sector, inspired by other high-profile cases such as that of Sam Bankman-Fried, who was sentenced to 25 years for fraud associated with the FTX exchange.