Founder of Crypto Lending Platform Celsius Sentenced to 12 Years in Prison for Fraud

The founder of the collapsed crypto platform Celsius has been sentenced to 12 years behind bars.

Alexander Mashinsky was initially arrested in July 2023 on charges of violating securities law by the U.S. Securities and Exchange Commission (SEC).

In December 2024, he  pleaded guilty to a multi-billion-dollar crypto fraud. The Department of Justice (DOJ) said Mashinsky falsely represented Celsius as a safe and secure platform and exaggerated its potential for profitability, greatly inflating its user base.

After Mashinky’s lawyers asked for a lenient , one-year sentence earlier this week, the former Celsius CEO was handed a 12-year sentence by the courts yesterday, according to a US Attorney’s Office press release.

Said US Attorney Jay Clayton in a statement:

“Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets. 

In the end, Mashinsky made tens of millions of dollars while his customers lost billions. America’s investors deserve better. The case for tokenization and the use of digital assets is strong but it is not a license to deceive. The rules against fraud still apply, and the SDNY (Southern District of New York) will hold those who flout them accountable for their crimes.”

According to Reuters, Mashinky’s representatives have not yet commented on the ruling.

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