Celsius Founder Faces 20-Year Sentence, CEL Token Surges 70%

Alexander Mashinsky, the former CEO of Celsius Network, is facing a recommended sentence of at least 20 years in prison. Prosecutors allege that Mashinsky led a fraudulent scheme that resulted in billions of dollars in losses and affected thousands of investors. Mashinsky founded Celsius in 2018 and promoted it as a secure alternative to traditional banks, where users could earn interest by storing their digital assets.

According to court documents, Mashinsky misled customers about the handling of their funds, employed risky investment strategies without their knowledge, and lied about the financial health of Celsius. He also manipulated the price of the company’s CEL token, secretly selling his personal stash for tens of millions of dollars. The collapse of Celsius into bankruptcy in 2022 left thousands of investors, many of whom were ordinary people, with significant financial losses.

Mashinsky pleaded guilty in December 2024 to two criminal counts: lying about the safety of Celsius’s investment platform and manipulating the price of CEL for personal gain. He admitted to personally profiting over $48 million from these schemes, while total losses exceeded $550 million. Despite his plea, prosecutors argue that Mashinsky has not fully accepted responsibility, attempting to shift blame to market conditions and his victims, and shielding assets through family-controlled trusts.

Government attorneys contend that a lengthy sentence is necessary to punish Mashinsky and to send a clear message to others in the crypto industry. The final sentence will be determined by a federal judge in New York.

In a surprising turn of events, the price of the CEL token surged by over 70% following the news of the sentencing recommendation, currently trading at $0.15. Despite this increase, the token remains significantly below its all-time high of $8.02, which was reached on June 4, 2021, indicating a decline of over 98% from that peak.