Founder of Celsius Faces 20 Years in Prison for Orchestrating Deliberate Fraud
The founder of Celsius, Alex Mashinsky, could potentially spend the next two decades behind bars. The US Department of Justice (DOJ) is seeking an exemplary sentence of 20 years for what it describes as a “cynical system of lies and personal enrichment” at the expense of thousands of investors.
Calculated Fraud, Not an Error
The DOJ leaves no room for doubt: this was not negligence or mismanagement, but a deliberate plan. In a 97-page memo filed on April 28th, the department accuses Mashinsky of personally orchestrating a fraudulent scheme that swallowed over $4.7 billion in assets belonging to Celsius’ clients, which have been frozen since withdrawals were halted on June 12, 2022.
What’s worse, the former CEO allegedly pocketed $48 million for himself, while concealing the true state of the platform and continuing to promise users security and transparency. The government memo states that these actions have caused losses exceeding $550 million, just within the context of his guilty plea.
Celsius: The Fall of a False Messiah in Decentralized Finance
The sentencing hearing is scheduled for May 8th, before federal judge John Koeltl in New York. In the meantime, the case has taken on symbolic proportions: that of a crypto entrepreneur who became an icon in mainstream DeFi, now presented by the US justice system as a methodical fraudster.
The DOJ reports that over 200 victims have submitted impact statements for the trial. This number reflects the human dimension of the Celsius scandal, beyond mere financial mechanics.
A Network of Ongoing Responsibilities
Mashinsky was not alone. His co-founder, Shlomi Daniel Leon, former Chief Strategy Officer at Celsius, jumped ship in October 2022, in the wake of the collapse. In July 2023, the Federal Trade Commission (FTC) expanded the charges: Leon, Mashinsky, and another co-founder, Hanoch Goldstein, were hit with a record $4.7 billion fine.
Celsius, once seen as a credible alternative to banks, ultimately turned out to be a house of cards built on user trust and the grand ambitions of its leaders.
