Alex Mashinsky, the founder and former CEO of Celsius Network, could spend up to 20 years behind bars as U.S. prosecutors push for severe penalties over his role in a massive fraud scandal that brought down the crypto lending platform in 2022.
On April 28, 2025, the U.S. Department of Justice (DOJ) filed a 97-page sentencing memo, urging the court to impose the harshest punishment. Prosecutors accused Mashinsky of executing a “deliberate, calculated” scheme filled with lies, deception, and theft to enrich himself. Their case describes a “years-long campaign” of manipulation and self-dealing that led to billions in losses for thousands of investors.
Mashinsky’s Guilty Plea and Investor Fallout
In December 2024, Mashinsky admitted guilt to one count of commodities fraud and one count of securities fraud. He confessed to manipulating the price of Celsius’s native token, CEL, while secretly selling his own holdings. As part of his plea agreement, he agreed to surrender $48 million in profits obtained through fraudulent activities.
Celsius’s collapse in July 2022 left roughly $4.7 billion in customer funds frozen when the platform suspended withdrawals. A bankruptcy filing later exposed a $1.2 billion hole in the company’s balance sheet. Mashinsky blamed the downfall on “poor asset deployment decisions,” but many investors point to deliberate mismanagement.
Victims of the collapse have sent over 200 emotional impact statements to the court, describing severe financial hardship and betrayal. Some have called for Mashinsky to receive a 30-year sentence, citing their ruined finances and lost trust in crypto lending services.
Sentencing and Market Reaction
Mashinsky’s sentencing is set for May 8, 2025, in a Manhattan federal courtroom. While the DOJ seeks a 20-year term, probation officials have suggested 15 years. Meanwhile, Mashinsky’s defense attorneys are pushing for a lighter sentence of just 366 days.
Interestingly, despite the legal chaos, Celsius’s CEL token has seen an unexpected surge. The price jumped over 70% to $0.1507, driven by speculative optimism about the platform’s potential rebound after bankruptcy.
The outcome of Mashinsky’s case highlights the increasing scrutiny facing cryptocurrency leaders and marks a crucial moment for accountability in the crypto industry’s rapid evolution.
