Prosecutors push for 20-year sentence for former Celsius CEO Alex Mashinsky, citing 'continuing danger he poses'

Prosecutors say that former Celsius CEO Alex Mashinsky should be sentenced to twenty years in prison for losing billions of customers' dollars. 

The U.S. Attorney's office for the Southern District of New York, led now by Jay Clayton, filed a sentencing memorandum on Monday ahead of Mashinsky's sentencing next week. 

"Mashinsky’s conduct made him rich at the expense of Celsius’s customers," prosecutors said. "When Celsius collapsed into bankruptcy, it wiped out the savings of ordinary retail investors who entrusted their cryptocurrency to the company based on Mashinsky’s lies."

Mashinsky pleaded guilty to two counts in December, including commodities fraud and another about a fraudulent scheme to manipulate the price of the firm's native token, CEL. He was arrested in 2023 after prosecutors said he defrauded customers and misled them about Celsius’ profitability. Mashinsky also faces charges involving securities fraud and wire fraud. 

Celsius operated as a crypto lender that allowed customers to earn interest and take out loans. The firm filed for bankruptcy in 2022 and was later wound up in 2024. As part of Celsius' wind-down, some funds were used to create a new bitcoin mining company called Ionic Digital.

'Lack of remorse'

Prosecutors said Mashinsky's "lack of remorse' shows that he is still dangerous. 

"He has abandoned all pretense of acknowledging his sustained wrongdoing, and he does not even feint at contrition," they said. "Instead, he claims he was motivated by a selfless devotion to service, his only mistakes excessive enthusiasm for Celsius and trusting the wrong executives." 

The sentencing memo also mentioned previous cases brought in the U.S., including a 150-year sentence for Ponzi scheme mastermind Bernie Madoff and 25 years for former FTX CEO Sam Bankman-Fried. 

"While Bankman-Fried was in his 20s and argued that his actions were attributable to youth and inexperience, Mashinsky, who is in his 60s, was indisputably old enough and experienced enough to better appreciate the crimes he was committing," prosecutors said. "The 25-year sentence for Bankman-Fried is therefore a meaningful data point for the Court to consider."

Clayton, who assumed his interim role in April as head of the U.S. Attorney's Office in the Southern District of New York, was previously chair of the Securities and Exchange Commission and has held advisory roles at crypto firms.  

Mashinsky is scheduled to be sentenced on May 8.