Celsius Founder Sentenced to 12 Years for $Billion Fraud

The founder of the defunct crypto lending platform Celsius, Alexander Mashinsky, has been sentenced to 12 years in prison for his role in a multi-billion-dollar fraud scheme. Mashinsky was initially arrested in July 2023 by the U.S. Securities and Exchange Commission (SEC) on charges of violating securities law.

In December 2024, Mashinsky pleaded guilty to the fraud, which involved falsely representing Celsius as a secure and profitable platform. The Department of Justice (DOJ) revealed that Mashinsky exaggerated the platform's potential for profitability and inflated its user base, misleading investors.

Despite his lawyers' request for a lenient, one-year sentence, Mashinsky was handed a 12-year prison term by the courts. U.S. Attorney Jay Clayton stated that Mashinsky targeted retail investors with false promises of safety and profitability, using their assets for risky bets and personal gain.

Clayton emphasized that while the case for tokenization and digital assets is strong, it does not justify deception. He reiterated that the rules against fraud still apply and that the Southern District of New York will hold those who violate them accountable.

Mashinsky's representatives have not yet commented on the ruling. The case highlights the ongoing scrutiny and legal consequences faced by those involved in the crypto industry, particularly those who engage in fraudulent activities.