Celsius Network founder Alex Mashinsky gets 12 years of imprisonment for crypto fraud
Celsius Network
founder and former CEO
Alex Mashinsky
has been sentenced to 12 years of prison in a crypto fraud case. According to a report by news agency Reuters, the founder of the bankruptcy cryptocurrency lender pleaded guilty in December to securities fraud and commodities fraud. He has now been sentenced to 12 years of jail by the
U.S. District Judge John Koeltl
in Manhattan.
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Mashinsky's is among the longest in a criminal case arising from the 2022 meltdown in cryptocurrency markets, the report adds.
Announcing the imprisonment, federal prosecutors said Mashinsky, 50, misled customers about how safe the company was and artificially boosted the value of its own cryptocurrency, Celsius. The prosecutors asked the court to give him at least 20 years in prison, calling it a "just punishment" for causing billions of dollars in losses and personally gaining over $48 million.
"Digital assets have strong potential, but they are not a license to deceive," said U.S. Attorney Jay Clayton from Manhattan.
Celsius Network founder pleads guilty
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As mentioned before, Mashinsky pleaded guilty last year in December. He said that he felt deep regret, and asked for a lighter sentence of one year and one day.
His final sentence includes three years of supervised release and the forfeiture of $48.4 million.
What is Celsius
Celsius, based in Hoboken, New Jersey, was founded in 2017 and filed for bankruptcy in July 2022 after a rush of customer withdrawals when cryptocurrency prices collapsed. At one point, Celsius promised up to 17% interest on deposits but ended up with a $1.19 billion gap in its finances.
Mashinsky, originally from Ukraine, moved to Israel with his family before later settling in New York. Along with the criminal charges, he is also facing civil lawsuits from the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Trade Commission, and New York Attorney General Letitia James.
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