Celsius Founder Alex Mashinsky Sentenced to 12 Years in PrisonNEWS | 13 May 2025A US federal judge in the Southern District of New York has sentenced Alex Mashinsky, founder of defunct cryptocurrency lending platform Celsius, to 12 years in prison.
On Thursday, at the end of a lengthy court hearing in Manhattan, Judge John Koeltl handed down the sentence.
Beforehand, the court heard from multiple former Celsius customers who testified to the damage Mashinsky’s actions had wrought on their lives. Mashinsky reportedly shed tears as he delivered his own prepared remarks, asking for forgiveness and issuing an apology.
In July 2023, the US Department of Justice charged Mashinsky with seven counts of fraud. Though he initially denied the charges, Mashinsky later pleaded guilty to two counts: commodities fraud and securities fraud.
As part of the plea deal, Mashinsky admitted to lying to Celsius customers about fundamental aspects of the business—including how their funds would be invested—and manipulating the price of a proprietary crypto coin for his personal financial benefit. He also agreed to forfeit $48 million to the DOJ.
“Alexander Mashinsky orchestrated one of the biggest frauds in the crypto industry,” said US Attorney Damian Williams in a statement at the time of the guilty plea. “Today’s convictions reflect this Office’s commitment to holding fraudsters like Mashinsky accountable for their crimes.”
Founded in 2017, Celsius marketed itself as a new-age alternative to traditional banks, which Mashinsky painted as unsafe, untrustworthy, and avaricious. At a conference in 2021, the Celsius founder appeared onstage wearing a plain T-shirt emblazoned with a slogan: “Banks are not your friends.”
During a period in which banks were offering almost no interest on savings, Celsius lured in customers with the promise of rates as high as 18 percent on crypto deposits. The company funded those interest payments by either investing or loaning out the crypto in its custody. By 2021, Celsius held upwards of $25 billion in customer assets, the DOJ claims.
Meanwhile, Mashinsky began to attract a devoted following. In hours-long Ask Mashinsky Anything livestreams, the Celsius founder preached to thousands of his congregation of “Celsians.”
However, in May 2022, things went south. The collapse of the Terra stablecoin and its sister token Luna simultaneously blew an almost billion-dollar hole in the Celsius balance sheet and, as crypto prices nosedived, sent panicked customers rushing to withdraw billions of dollars’ worth of crypto from their accounts. After its Terra and Luna investments and loans extended to other companies affected by the downturn went sour, court filings indicate, Celsius no longer had the necessary funds to pay up and was eventually forced to suspend withdrawals.
In July of that year, Celsius filed for bankruptcy, trapping more than $4.7 billion of its customers’ funds. (Through the bankruptcy proceeding, customers have since recovered roughly 60 percent of the funds they lost, but only partially in cash form.)
When Mashinsky was arrested, prosecutors accused him of misleading Celsius customers about the nature of the business. Though Mashinsky portrayed Celsius as a “modern-day bank,” the original indictment stated, he operated the company as “a risky investment fund, taking in customer money under false and misleading pretenses and turning customers into unwitting investors in a business far riskier and far less profitable than what Mashinsky had represented.”Author: Elana Klein. Joel Khalili. Makena Kelly. Kate Knibbs. Zeyi Yang. Matt Giles. Paresh Dave. Chris Stokel-Walker. Lauren Goode. Source
