Prosecutors push for 20-year sentence for ex-Celsius CEO

Federal prosecutors are seeking a 20-year prison sentence for Alex Mashinsky, the former CEO of Celsius Network (CRYPTO:CEL), in connection with a multi-million-dollar fraud scheme that led to over $550 million in losses for cryptocurrency investors.  

In a sentencing memorandum filed on April 28, prosecutors from the U.S. Attorney's Office for the Southern District of New York accused Mashinsky of leading a “years-long campaign of lies” to promote Celsius as a safe investment platform.  

According to the prosecution, Mashinsky deceived investors by assuring them their deposits were secure while secretly funneling funds into high-risk ventures and manipulating the value of Celsius’ CEL token.  

Mashinsky, 59, pleaded guilty to wire fraud and market manipulation charges in December 2024.  

The charges stem from allegations that he directed employees to artificially inflate the value of the CEL token, enabling him to sell $48 million worth of his holdings at inflated prices, based on customer assets.  

The collapse of Celsius in July 2022 froze $4.7 billion in customer funds, leading to severe financial losses for retail investors.  

Statements from victims, cited in the court filing, describe devastating impacts, including lost life savings, foreclosed homes, and mental health crises.  

Despite some funds being recovered during bankruptcy proceedings, prosecutors estimate that victims are still short by over $1 billion.  

In the memorandum, prosecutors noted Mashinsky’s “profound lack of remorse,” arguing that he has downplayed his actions and blamed external factors, despite his guilty plea.  

Mashinsky’s conduct is compared to other crypto fraud cases, including FTX founder Sam Bankman-Fried’s case, which resulted in a 25-year sentence.  

U.S. District Judge John G. Koeltl is set to decide Mashinsky’s sentence on May 8.  

The charges he faces carry a statutory maximum sentence of 30 years.

At the time of reporting, the Celsius Network price was $0.1161.