Celsius Founder Alex Mashinsky Gets 12-Year Prison Sentence

US District Judge John Koeltl in Manhattan has sentenced Alex Mashinsky, the 59-year-old CEO of the fallen crypto platform Celsius, to 12 years in prison.

Celsius, once a prominent cryptocurrency lending platform, attracted over $25 billion in customer assets by offering high-interest returns on crypto deposits.

However, during the 2022 crypto market crash and the collapse of the Terra stablecoin, Celsius faced a financial crisis. The company froze customer withdrawals and filed for bankruptcy, leaving a $1.2 billion hole in its balance sheet.

The US Securities and Exchange Commission (SEC) started an investigation into Celsius's collapse in July 2023. Mashinsky was arrested shortly after.

Prosecutors revealed that he misrepresented the company’s financial health and used customer funds to manipulate the price of CEL tokens, personally profiting over $48 million.

Mashinsky admitted his guilt to several financial crimes in December 2024, including commodities and securities fraud. According to U.S. Attorney Jay Clayton, he promised retail investors their crypto would be safer than in a bank, but instead used their money for risky bets and personal gain.

During the case, prosecutors compared Alex Mashinsky to other well-known fraudsters, including Sam Bankman-Fried, who got 25 years in prison for the FTX collapse.  Mashinsky’s lawyers pushed back, arguing that the two cases are completely different. They emphasized that, unlike Bankman-Fried, Mashinsky wasn’t accused of stealing or embezzling customer funds.

Despite his defense team’s request for a lighter sentence of just over a year, the court handed down a 12-year prison term, citing the significant financial and emotional harm caused to thousands of investors.

In addition to prison time, Mashinsky was ordered to forfeit $48 million and will face three years of supervised release.