Alexander Mashinsky, the founder and former CEO of Celsius Network, a cryptocurrency lending platform, was sentenced to 12 years in prison. A prosecutor described him as a predator who exploited the hopes of vulnerable customers by encouraging them to invest their life savings in what was presented as a safe opportunity.
U.S. District Judge John G. Koeltl handed down the sentence, citing the seriousness of Mashinsky’s crimes, which allowed him to gain over $45 million. Many of his customers experienced severe financial and psychological distress. Celsius declared bankruptcy in 2022 after risky financial decisions were uncovered involving some of the $20 billion invested by thousands of customers. The platform had promised security while claiming to operate as a modern bank where crypto assets could yield interest.
The defense attributed Celsius’s collapse to a significant downturn in cryptocurrency markets during May and June 2022, insisting that Mashinsky’s actions lacked any intention to exploit or harm. However, Assistant U.S. Attorney Allison Nichols portrayed him as a financial predator, asserting that Mashinsky misled customers by overstating Celsius’s growth potential.
Nichols stated that even with bankruptcy recovery efforts, customers would not be financially restored. Before sentencing, Mashinsky expressed remorse, recalling his childhood escape from a Ukrainian town in the former Soviet Union to Israel and later to the United States. He apologized, stating he never intended harm.
In December, Mashinsky pleaded guilty to misleading customers from 2018 to 2022 by falsely assuring them their investments were secure while misrepresenting Celsius’s profitability and engaging in risky market activities.
His attorney, Marc Mukasey, acknowledged the intense pain reflected in victim impact statements. Several victims spoke at the hearing, with Cameron Crewes from a victims’ committee advocating for a harsh sentence, noting that about 250 victims had died without seeing justice or compensation.
U.S. Attorney Jay Clayton stated that Mashinsky profited tens of millions while customers lost billions, emphasizing that the promise of digital assets should not excuse fraudulent behavior.
