09-05-2025
Ex-Celsius CEO Mashinsky gets 12-year sentence for crypto fraud
Alexander Mashinsky, the former CEO of crypto firm Celsius Network, has been sentenced to 12 years in prison for commodities fraud and securities fraud.
0
Mashinsky pled guilty in December over his part in a scheme to defraud investors.
Celsius operated a crypto asset platform offering customers 'rewards' on deposited assets, secured loans, and custody services. Marketing itself as the 'safest place for your crypto,' the firm encouraged customers to 'unbank' themselves by transferring crypto assets to its platform.
By late 2021, Celsius had become one of the largest crypto platforms in the world, holding approximately $25 billion in assets at its peak.
However, persecutors say that Mashinsky orchestrated a years-long scheme to mislead customers about Celsius's proprietary crypto token CEL, manipulating its price by spending hundreds of millions purchasing it on the open market to artificially inflate its value. Sometimes, they did this using customer funds without disclosing the fact.
While publicly claiming he was not selling CEL, he was doing just that, profiting to the tune of approximately $48 million.
In June 2022, Celsius announced it was halting customer withdrawals, leaving hundreds of thousands of customers unable to access $4.7 billion on the platform. The firm filed for bankruptcy the following month.
US Attorney Jay Clayton says: 'Alexander Mashinsky targeted retail investors with promises that he would keep their 'digital assets' safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets. In the end, Mashinsky made tens of millions of dollars while his customers lost billions."
Mashinsky joins fellow crypto bosses FTX founder Sam Bankman-Fried, Binance's Changpeng Zhao and Do Kwon of Terraform Labs in receiving prison time.
