Prosecutors Seek 20-Year Sentence for Celsius Ex-CEO Mashinsky in $550M Fraud Case

Prosecutors have requested a 20-year prison sentence for Alex Mashinsky, the former CEO of Celsius, for his involvement in a multi-million-dollar fraud scheme. The Department of Justice (DOJ) submitted a 97-page document on April 28, outlining Mashinsky's alleged "years-long campaign of lies and self-dealing" that resulted in substantial financial losses for thousands of customers. The fraudulent activities led to approximately $4.7 billion in customer funds being frozen when Celsius halted withdrawals in June 2022.

Prosecutors have emphasized that Mashinsky's actions were deliberate and calculated, aimed at deceiving customers and enriching himself. They argued that a severe sentence is necessary to restore trust in the cryptocurrency industry, which has been damaged by such fraudulent behavior. The DOJ believes that a harsh penalty will send a clear message that such actions will not be tolerated, especially in areas where regulations are still evolving.

The court is scheduled to sentence Mashinsky on May 8, with Judge John Koeltl from the Southern District of New York overseeing the hearing. The proceedings may also address financial penalties to help recover some of the funds lost due to Mashinsky's actions. Mashinsky's legal troubles escalated after he pleaded guilty in December 2024, admitting to leading the fraudulent activities at Celsius. The DOJ reported that the total losses from his crimes exceeded $550 million, with Mashinsky personally gaining over $48 million during the scheme.

The DOJ's request for a 20-year sentence underscores the severity of the charges against Mashinsky and the impact of his actions on the cryptocurrency industry. The case highlights the need for stricter regulations and oversight to prevent similar frauds in the future. The upcoming sentencing hearing will be a critical moment in determining the consequences for Mashinsky's actions and setting a precedent for future cases involving cryptocurrency fraud.