Celsius Ex-CEO Mashinsky Sentenced to 12 Years for Fraud

Former Celsius CEO Alex Mashinsky has been sentenced to 12 years in prison for fraud by the US federal court for the Southern District of New York. Mashinsky’s legal team had argued for a lighter sentence, citing his clean record prior to the Celsius incident, his military service, and his willingness to plead guilty. However, US prosecutors advocated for a harsher penalty, recommending a 20-year sentence on April 28.

This sentencing comes at a time when President Donald Trump's administration has shown mixed signals regarding leniency towards crypto fraudsters. Trump's second term began with high-profile pardons of crypto executives, suggesting a potential leniency towards such cases. However, Mashinsky’s sentence indicates a stricter stance on crypto-related crimes.

The Department of Justice, under the leadership of Trump-nominated US attorney Jay Clayton, emphasized that the suggested 20-year sentence serves as a critical warning to entrepreneurs and executives in the cryptocurrency industry. Clayton argued that the severity of the sentence was warranted because the fraud targeted unsophisticated retail investors rather than institutional parties with protections and expertise.

Mashinsky’s defense team highlighted his long career in business, devotion to family, and service with the Israel Defense Forces. They also drew distinctions between Mashinsky’s case and that of Bankman-Fried, claiming that there were no allegations or proof that Mashinsky misappropriated, embezzled, or stole any customer assets or Celsius money. On May 5, Mashinsky’s legal team argued that these mitigating factors should warrant a sentence of no more than 366 days, describing the suggested 20-year term as a “death-in-prison sentence.”

Mashinsky’s sentence follows a series of high-profile pardons by Trump, including the pardon of Silk Road 2.0 founder Ross Ulbricht and the commutation of sentences for three BitMEX crypto exchange executives. These actions have sparked interest in presidential pardons among white-collar convicts.

High-profile crypto defendants, such as Roger Ver and Sam Bankman-Fried, have also taken notice of the potential for presidential pardons. Ver, facing federal tax evasion charges, released a video pleading for a commutation from Trump. Bankman-Fried, the former CEO of FTX, has also explored the possibility of a presidential pardon.

The current administration is still in the process of establishing legal frameworks for crypto, and Mashinsky’s sentence serves as a clear message that certain financial crimes will not go unpunished. This sentencing sets a tone for enforcement in the Trump era, indicating that while there may be leniency in some cases, severe penalties will be imposed for fraud targeting retail investors.