Alex Mashinsky, founder of Celsius, has been sentenced to 12 years in prison for securities and derivatives fraud after the collapse of his crypto platform.
He manipulated the price of the CEL token to make $48 million, while lying about fund security and internal practices at Celsius.
The judge handed down a firm sentence, with no possibility of an appeal, along with the requirement to return the illegal gains, in the face of damning testimony from victims left destitute and without any real signs of remorse.
Founder of Celsius Receives 12-Year Prison Sentence
The founder of Celsius, Alex Mashinsky, was sentenced to 12 years in prison on Thursday by a federal court in New York. The former CEO of the now bankrupt crypto platform pleaded guilty to securities and derivatives fraud. Resulting in a heavy sentence, a ruined empire… and thousands of victims.
Manipulation, Lies, and Millions
Before Celsius’ collapse in 2022, Mashinsky presented himself as a decentralized finance messiah. He claimed that client funds were ‘safer than in a bank’, touted fictional regulation, and denied non-collateralized loans – while heavily practicing them. The prosecution also alleges that he manipulated the price of the CEL token to pocket $48 million personally.
The end result: a $7 billion hole in the company’s accounts, $1.2 billion at the time of bankruptcy, reevaluated at current rates. Over 100,000 creditors claim to have collectively lost $4.7 billion.
A Total Disconnect in Defense
During the hearing, Mashinsky’s lawyers tried everything to soften the court: his military service in Israel, his alleged commitment to the homeless, and even a book in progress… on gravity. The defendant himself broke down in tears, apologizing to his victims. ‘I came from nothing, I know how hard it is to earn and save,’ he said.
However, six victims testified to their ruin, sleepless nights, and even deaths since Celsius’ collapse. ‘He writes about gravity, but doesn’t understand the gravity of what he’s done,’ one said. Another mentioned they could no longer finance their children’s education. All denounced the lack of true remorse and the profits made by Mashinsky and his wife right until the end, including through ‘Unbankrupt Yourself’ t-shirts sold after bankruptcy.
A Final Fall
Judge Koeltl ruled: 12 years in prison, with no possibility of an appeal. Mashinsky must also return $48 million and several real estate properties. He will begin his sentence in September, likely at FCI Otisville prison, the same as Avi Eisenberg, recently sentenced to four years in prison.
If he serves his entire sentence, Alex Mashinsky will be released at 72. Too late to ‘debank’ himself from his mistakes.
