Alexander Mashinsky, the former CEO of Celsius Network, has been sentenced to 12 years in prison after pleading guilty to two counts of fraud in December 2024. U.S. District Judge John G. Koeltl delivered the sentence on May 8, 2025, in Manhattan court, significantly less than the 20-year term prosecutors had sought, yet one of the longest sentences in criminal cases arising from the 2022 cryptocurrency market collapse.
Founded in 2017, Celsius Network filed for bankruptcy in July 2022 after customers rushed to withdraw deposits as cryptocurrency prices fell. Prosecutors said Mashinsky misled customers about Celsius's safety and artificially inflated the value of the company's proprietary token (CEL), causing over $5 billion in losses to investors. The prosecution claimed he personally benefited by more than $48 million from the fraud, while the company had a $1.19 billion balance sheet deficit when seeking bankruptcy protection. The crypto lender had offered interest rates as high as 17% on some deposits, which proved unsustainable.
Mashinsky's case is one of several major fraud cases that have shaken the cryptocurrency industry in recent years. FTX founder Sam Bankman-Fried is serving a 25-year prison sentence, while Binance founder Changpeng Zhao received 4 months for facilitating money laundering. Do Kwon, founder of Terraform Labs, whose stablecoin project caused a $40 billion collapse, settled with the U.S. Securities and Exchange Commission for $4.5 billion. For Celsius customers, the reimbursement process began in February 2024, with the company promising to repay $3 billion in cash and cryptocurrency as part of its restructuring proceedings.
Sources:
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Reuters
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3.
Liz Napolitano
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Elendu Benedict
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MacKenzie Sigalos
