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Alex Mashnisky

Celsius CEO Alex Mashinsky Has Been Sentenced to 12 Years in Prison for Crypto Scam 

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  • Alex Mashinsky, former CEO of Celsius Network, was sentenced to 12 years in prison after pleading guilty to securities and commodities fraud.
  • Celsius filed for bankruptcy in 2022 after a market crash triggered withdrawals; it was later revealed that the platform had a $1.19 billion deficit, which led to one of the largest FTC settlements in history.


The former CEO of Celsius Network, Alex Mashinsky, has been sentenced to 12 years in prison for his involvement in a multi-billion-dollar crypto. He also admitted to two fraud charges. This conviction follows a lengthy investigation done into the operations of Celsius Network, a once-prominent cryptocurrency lending platform.

Prior to the platform shutting down, Alex was regarded as a leader in the crypto industry, and Celsius was seen as the “bank” for digital assets.

In December, Mashinsky pleaded guilty to securities and commodities fraud. In a Manhattan court. The U.S. District Judge John G. Koeltl handed down the sentence, which many have regarded to be among the harshest given in connection with the 2022 collapse of the crypto market. According to prosecutors, Mashinsky’s actions have been seen as part of a large-scale scheme to deceive investors.

The Collapse of Celsius and the Origin Alex Mashinky Legal Issues


The platform was founded in 2017 and is based in Hoboken, New Jersey. In July 2022, Celsius filed for Chapter 11 bankruptcy after a ton of customer withdrawals followed a drop in crypto prices. Initially, the company promised customers returns as high as 17% on deposits, but during the process of protecting their platform in court, it was discovered that they had fallen short about $1.19 billion. Alex Mashinsky’s legal issues officially began in 2023 when he was arrested on charges involving securities, commodities, and wire fraud. 

Around the same time, Celsius agreed to pay a $4.7 billion settlement with the Federal Trade Commission, one of the largest in its history. That agreement depended on Celsius returning the remaining customer funds through bankruptcy.

But it was later discovered by Rye prosecutors that Mashinsky gave false information about the safety and profits of Celsius’s platform while secretly selling millions of dollars in personal assets. When he was asked, he first claimed innocence; however, his guilty plea and final sentencing brought an end to a long-running case, which also led to charges from the SEC and CFTC. Both agencies accused him and Celsius of carrying out a large-scale crypto fraud. His sentencing shows a significant development in the ongoing efforts to hold crypto executives accountable for fraudulent activities.

More Reading: XRP Price Set To Continue Bleeding As Market Eyes Are Drawn To New PayFi Star

Celsius CEO Alex Mashinsky Finally Breaks Silence Amidst the Chaos

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Alex Mashinsky, the embattled company Celsius’s CEO, has finally spoken out on the topic three days after the crypto lender abruptly declared that all customer withdrawals, swaps, and transfers would be halted.

Those expecting answers as to when users will be able to withdraw monies again will be disappointed by Mashinsky’s response.

Mashinsky took to Twitter, addressing publicly for the first time since his company’s withdrawals were halted on Sunday night, to reassure the Celsius community that the company’s team is working “round the clock” to resolve the issue and to ask for users’ patience.

https://twitter.com/Mashinsky/status/1537147449088872449

Celsius CEO says that the team is working non-stop

Notably, Mashinsky offered no indication of when he hopes or expects Celsius to be operational again. Soon after, Twitter users pleaded with Mashinsky for assurances about the security of clients’ deposits, but he did not react.

Celsius halted withdrawals on Sunday to “stabilize liquidity” and “preserve and protect assets” after Lido’s Staked Ether (stETH), a cryptocurrency provided on the platform, began to exhibit abnormalities.

The Ethereum 2.0 beacon chain (which will eventually combine with the Ethereum mainnet) symbolizes stETH, which is designed to be pegged to the value of ETH. As a result, stETH is frequently used as collateral on platforms such as Celsius to borrow ETH.

If stETH remains depegged from ETH, it’s unclear how the team will address the problem (at the time of writing, stETH is currently trading at .93 ETH). If no alternative finance sources can be identified, the corporation has reportedly contacted solicitors to investigate restructuring the company.

The announcement of the withdrawal freeze knocked Celsius’ native coin down 70% in an hour on Sunday. Mashinsky had been speaking much more freely just a day before, chastising a Twitter user for promoting “fear, uncertainty, and doubt” by citing allegations that retail investors were being locked out of their accounts.