DOJ Seeks 20-Year Sentence for Celsius CEO Mashinsky Over $550M Fraud

The U.S. Department of Justice (DOJ) has filed a sentencing memorandum seeking a 20-year prison sentence for Alex Mashinsky, the former CEO of the now-bankrupt crypto lending platform Celsius. The DOJ alleges that Mashinsky orchestrated a "years-long campaign of lies and self-dealing" that defrauded thousands of investors, resulting in significant financial losses.

According to the court document, Mashinsky admitted in his December 2024 guilty plea that he led fraudulent activities causing over $550 million in losses and personally gained at least $48 million. Prosecutors emphasized that Mashinsky's actions were intentional and designed to deceive and steal from retail investors, rather than being a result of misjudgment or market misfortune.

At its peak in 2021, Celsius claimed to manage over $20 billion in crypto assets, positioning itself as a safe and profitable alternative to traditional banking. However, the DOJ revealed that the company engaged in risky lending practices, made speculative trades, and used customer funds to manipulate the price of its CEL token. Mashinsky, despite assuring users that he was holding onto his CEL tokens, had actually sold more than $48 million worth of them at inflated prices.

Celsius filed for bankruptcy in July 2022, leaving around $4.7 billion in user assets locked on the platform. The DOJ argues that Mashinsky’s sentence should reflect the significant harm caused to investors and serve as a deterrent to similar misconduct in the crypto industry.

Last week, disgruntled investors from across the globe urged a federal judge to impose the maximum sentence on Mashinsky for his role in the company’s 2022 collapse. Over 200 victim impact statements were submitted to the court, with the majority demanding a severe punishment, citing financial ruin, emotional distress, and shattered dreams. One investor compared Mashinsky to Bernie Madoff and called for a life sentence, blaming him for pushing some victims to suicide.

While his legal team has requested a sentence of just over a year, probation officers have recommended 15 years. The call for a harsh sentence comes amid a broader softening in crypto enforcement under the Trump administration, which has recently pardoned several high-profile crypto figures.