Celsius Founder Faces 20-Year Sentence For Fraud

Alex Mashinsky, the former CEO of Celsius Network, is set to be sentenced on May 8 in New York. He faces up to 20 years in prison after pleading guilty to two criminal charges: commodities fraud and price manipulation of Celsius’s own crypto token, CEL. Mashinsky admitted his guilt in December 2024, over a year after federal prosecutors initially filed multiple charges against him. His sentencing date was delayed from April 8 at the request of his legal team, who sought more time to present evidence.

Celsius Network, once a prominent crypto lending platform, collapsed in 2022 following the implosion of Terra, a significant decentralized finance project. The collapse had widespread repercussions across the industry. Before its bankruptcy, Celsius reportedly held $13 billion in customer deposits. U.S. authorities, including the Department of Justice, the Securities and Exchange Commission, and the Federal Trade Commission, aggressively pursued Mashinsky. They accused him of deceiving investors about Celsius’s financial health and artificially inflating the value of the CEL token for personal and corporate gain.

During court proceedings, Mashinsky’s lawyers argued that he was not acting maliciously but rather relied heavily on advice from internal experts. Prosecutors, however, claimed that Mashinsky knowingly misled customers and manipulated token prices for personal and corporate benefit. While his plea deal reduced the number of charges, the remaining ones still carry significant potential sentences. No sentencing recommendation has been made public yet.

Mashinsky is part of a broader crackdown on high-profile crypto executives following the 2022 crypto market collapse. Sam Bankman-Fried, the founder of FTX, received a 25-year sentence in 2024 for fraud offenses. Do Kwon, co-founder of Terraform Labs, was extradited to the United States and is scheduled for trial in January 2026. These high-profile cases underscore U.S. regulators' focus on holding crypto leaders accountable for investor harm.