Celsius Network founder Alexander Mashinsky was sentenced Thursday to 12 years in prison for defrauding customers out of millions of dollars in a crypto lending scheme that collapsed in 2022. US District Judge John G. Koeltl described the crimes as "extremely serious," noting that Mashinsky, 59, personally gained over $45 million while many customers suffered devastating financial and psychological losses after the crypto platform collapsed, the AP reports. Mashinsky "made tens of millions of dollars while his customers lost billions," said US Attorney Jay Clayton.
Celsius, once pitched as a safe place for investors to earn interest on crypto assets, filed for bankruptcy after risky financial moves involving some $20 billion in customer deposits came to light. Prosecutors argued Mashinsky deliberately misled customers about the safety of their investments while exaggerating the company's stability and profitability. Assistant US Attorney Allison Nichols said Mashinsky "preyed on hope," selling vulnerable investors on promises he knew he could not keep. Mashinsky pleaded guilty to one count of securities fraud and one count of commodities fraud in December, the Verge reports.
During the sentencing hearing in New York, Mashinsky's defense attributed the company's failure to the sharp downturn in cryptocurrency markets in 2022, denying he acted maliciously or intended harm. Victim statements described significant hardships, and a victims' committee representative said nearly 250 victims died before seeing any compensation or justice. Mashinsky sobbed several times as he apologized to customers. (This content was created with the help of AI. Read our AI policy.)
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