Former Celsius CEO Sentenced to 12 Years in Prison

Alex Mashinsky, the founder and former chief executive of cryptocurrency lender Celsius Network, was sentenced on Thursday, May 8, 2025, to 12 years in prison. The sentencing followed his guilty plea in December to charges of securities fraud and commodities fraud.

The sentence was imposed by U.S. District Judge John Koeltl in Manhattan and is noted as being among the longest prison terms handed down in a criminal case stemming from the widespread turmoil in cryptocurrency markets in 2022. By comparison, Sam Bankman-Fried, who previously led the FTX exchange and was convicted of fraud, is currently serving a 25-year prison sentence and is in the process of appealing.

Federal prosecutors had alleged that Mr. Mashinsky, 59, misled customers regarding the safety of Celsius's platform and artificially inflated the value of Celsius's proprietary token, Cel. They had sought a prison term of at least 20 years, describing it as "just punishment" for Mr. Mashinsky, citing that he had victimized thousands of individuals, resulting in billions of dollars in losses, while personally benefiting by more than $48 million.

U.S. Attorney Jay Clayton in Manhattan issued a statement, saying, "The case for tokenization and the use of digital assets is strong but it is not a license to deceive."

Mr. Mashinsky had sought a sentence of one year and one day in prison, stating that he felt remorse and wished to make amends to his family and former Celsius customers. His imposed sentence includes three years of supervised release and a forfeiture of $48.4 million. Lawyers representing Mr. Mashinsky were not immediately available for comment following the sentencing.

Celsius Network, founded in 2017 and based in Hoboken, New Jersey, filed for Chapter 11 bankruptcy protection in July 2022. This action occurred after customers initiated a rush to withdraw their deposits as cryptocurrency prices declined. At the time it sought bankruptcy protection, Celsius had a reported balance sheet deficit of $1.19 billion, having previously offered interest rates as high as 17% on some deposits.

Mr. Mashinsky, who was born in Ukraine, emigrated with his family to Israel and later moved to New York after visiting the city in 1988. Cryptocurrency lenders typically operated by promising easy loan access and high interest rates to depositors while lending tokens to institutional investors, aiming to profit from the difference in rates. In addition to the criminal charges, Mr. Mashinsky has also faced civil lawsuits brought by regulatory bodies including the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the U.S. Federal Trade Commission, and New York Attorney General Letitia James.