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Celsius Collapse

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.

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Alex Mashinsky on the Verge of 20-Year Sentence as DOJ Slams Crypto Fraud Mastermind

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  • The Department of Justice has requested a 20-year prison term for Mashinsky, emphasizing that his actions were deliberate and not a result of negligence.
  • Despite pleading guilty, Mashinsky still refuses to take full responsibility for his fraudulent acts, shifting blame to external factors while personally profiting $48 million from the scheme.

The Department of Justice (DOJ) has requested that the founder of Celsius, Alex Mashinsky, serve a 20-year prison sentence because they believe that his actions didn’t come as a result of negligence or market misfortune but rather a series of calculated and deliberate decisions to lie. Their decision underscored the gravity of his offenses and the damage he inflicted on investors.

One of the co-founders of the collapsed crypto platform, Alex Mashinsky, could spend 20 years in prison if the U.S. Department of Justice gets its way. In a memo filed on the 28th of April, the DOJ asked the court to give him a strong sentence for his role in the platform’s fraud.

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Alex Mashinsky on the Verge of 20-Year Sentence as DOJ Slams Crypto Fraud Mastermind 2

According to them, his actions were not a mistake but instead a purposeful act to scam users. This mistake caused around $7 billion in damage and hurt thousands of people. After Celsius froze withdrawals in June 2022, users lost access to about $4.7 billion in combined crypto assets. The DOJ described Mashinsky’s behavior as a long-running scheme driven by greed and deception.

Mashinsky’s Guilty Plea and Refusal to Take Responsibility

Mashinsky, who admitted guilt in December 2024, misled users about the security of their money and secretly manipulated the CEL token to make a profit.

Despite confessing to the court, he still avoids taking complete responsibility for his actions but instead points fingers at outside forces, including officials, the market, and even the people he stole from. Prosecutors said his actions were not mistakes or poor judgment but clear plans to cheat and steal for personal gain.

He made at least $48 million for himself after causing over $500 million in damage. When the company was still in operation, it claimed to have managed $20 billion in crypto, but behind the scenes, it took big risks, used customer funds to pump token prices, and gave ‘hodl-ers’ false promises.

Although he told investors he was holding CEL tokens, he had actually sold the tokens for millions at its peak. The DOJ wants Mashinsky’s punishment to match the damage done and warn others in the crypto world.

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Former Celsius CEO Alex Mashinsky Faces Life Sentence Call

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  • Alex Mashinsky, former Celsius CEO, accepted a guilty plea to the 2022 Celsius collapse and could face a life sentence.
  • More than 200 victims submitted emotional statements to the court, suggesting that the maximum punishment should be imposed regarding their financial and emotional losses.
  • Mashinsky withdrew millions ahead of the time when Celsius went bankrupt, infuriating investors who would no longer have access to their funds.

According to Bloomberg, Celsius Network’s former CEO, Alex Mashinsky, now faces a potential sentence to prison for life as hundreds of victims who invested in the platform ask a US judge to impose a life sentence on him. This is part of legal proceedings after the Celsius 2022 collapse. 

The crypto lending company’s founder, Mashinsky, has already admitted to fraud charges related to the company’s downfall.

Over 200 Statements Targeted the Celsius Founder Directly

More than 200 of the statements made by people saying they suffered because of the collapse were submitted to the court this week. The judge has been informed by most of these victims that they want Mashinsky to receive the maximum punishment permitted by the law. 

Brandon Lawrence, one of the investors, claimed that he has lost 1.5 Bitcoin (BTC) and now has debt and a damaged reputation. Alex Mashinsky’s and the company’s bankruptcy decision ruined his belief in cryptocurrency, he revealed.

Most of the victims are demanding the harshest sentence they can receive, while a few are willing to accept a lighter sentence if Mashinsky pays them back. Levenberg, a retired teacher who lost about $400,000 in retirement savings, suggested that a three-year sentence would be okay should he return the stolen money.

Mashinsky and his legal team appealed to the judge for no more than a one-year prison sentence. This, however, is not recommended by probation officers, who are suggesting 15 years. 

Before Bankruptcy Filing, Alex Mashinsky Withdrew Millions

In June 2022, Celsius got into trouble by freezing customer withdrawals, preventing investors from accessing their money. Then, a month later, the company went bankrupt.

It had only $167 million available at the time, far less than what was required to pay its users back. Court records show that Alex Mashinsky and his wife subsequently pulled about $12 million in cryptocurrency before the company crashed.

Set up in 2018, Celsius used to have more than 200 workers and manage about $10 billion in crypto assets by 2021. A year later the company’s ascent came to an abrupt end, and its former CEO now faces the real possibility of spending the rest of his life in prison.