News

Celsius Founder Sentenced to 12 Years for Crypto Fraud

by Crypto Hobby

Updated June 05, 2025

Man in suit in court. Judge. Gavel. — "Celsius Founder Sentenced to 12 Years for Crypto Fraud" - thumbnail

Alexander Mashinsky, founder and former CEO of Celsius Network, has been sentenced to 12 years in prison for crypto fraud. This significant ruling follows his guilty plea to securities and commodities fraud, marking one of the longest sentences in a crypto-related criminal case stemming from the 2022 market meltdown.

Celsius Founder Receives 12-Year Sentence for Crypto Fraud

Alexander Mashinsky, 59, was sentenced by US District Judge John G. Koeltl in Manhattan. Prosecutors had sought a minimum of 20 years, labeling Mashinsky a "predator" who exploited the hopes of vulnerable customers. The judge emphasized the "extremely serious" nature of Mashinsky's crimes, which allowed him to personally gain over $45 million while many customers suffered significant financial and psychological harm.

The Collapse of Celsius Network

Celsius Network, founded in 2017, declared bankruptcy in July 2022. This collapse exposed Mashinsky's risky financial bets with the $20 billion entrusted by thousands of customers. Despite promising a secure platform where crypto assets could earn interest, Celsius had a $1.19 billion balance sheet deficit when it sought bankruptcy protection. Mashinsky had misled customers between 2018 and 2022, fabricating the company's profitability and exposing customer funds to uncollateralized loans and undisclosed risky market bets.

Legal Proceedings and Victim Impact

Mashinsky pleaded guilty in December to commodities fraud and a scheme to manipulate the Celsius token. During the sentencing, Assistant US Attorney Allison Nichols stated that Mashinsky "preyed on hope," knowing exactly what he was doing. Mashinsky expressed remorse, apologizing to customers and referencing his difficult past as a Ukrainian immigrant. However, victim impact statements submitted to the court were described as "brutal," with one victim committee member, Cameron Crewes, calling for a "harsh sentence" and noting that nearly 250 victims had died before seeing justice.

Broader Implications for the Crypto Industry

Mashinsky's downfall mirrors that of other prominent crypto executives, including Sam Bankman-Fried of FTX and Changpeng Zhao of Binance. US Attorney Jay Clayton emphasized that while the case for digital assets is strong, it is "not a license to deceive," and the rules against fraud still apply. Mashinsky's sentence includes three years of supervised release and a $48.4 million forfeiture. He also faces civil lawsuits from the U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading Commission, U.S. Federal Trade Commission, and the New York Attorney General.

Key Takeaways

Alexander Mashinsky, Celsius Network founder, received a 12-year prison sentence for crypto fraud.
He was found guilty of misleading customers and making risky financial bets with their funds.
The sentencing highlights ongoing efforts to hold crypto executives accountable for fraudulent activities.
Mashinsky's case is one of the longest sentences in a crypto-related criminal case following the 2022 market downturn.
Victims suffered significant financial and psychological harm, with many not expected to be made financially whole.