As Bloomberg News reported, the sentence was handed down by US District Judge John Koeltl in Manhattan, nearly five months after Mashinsky pleaded guilty to two criminal charges tied to fraud and market manipulation.
Prosecutors had sought a 20-year prison term, describing the 59-year-old as “unrepentant” and emphasizing the scale of harm inflicted on Celsius users. According to federal authorities, Mashinsky profited $42 million from the scheme.
Court proceedings revealed that Mashinsky misled hundreds of thousands of investors by promoting Celsius as a safe alternative to traditional banking while concealing its financial instability.
He also engaged in manipulative trading practices that artificially inflated the value of CEL, allowing him to sell large personal holdings at inflated prices. Celsius filed for bankruptcy in July 2022, shortly after freezing customer withdrawals.
As part of the plea agreement, Mashinsky accepted a sentencing guideline of up to 30 years and waived his right to appeal any sentence under that threshold.
During the December hearing, Mashinsky admitted to deceiving Celsius customers by presenting inflated yields and overstating the platform’s financial health.
He also acknowledged his role in manipulating CEL’s market value. In the same case, former Celsius chief revenue officer Roni Cohen-Pavon pleaded guilty in September 2023 and agreed to cooperate with prosecutors, providing details about the failed firm’s internal operations.
The defense requested an adjournment to allow more time to prepare a sentencing memorandum, but Judge Koeltl proceeded with the hearing as scheduled.
In the lead-up to sentencing, prosecutors argued that Mashinsky’s conduct represented a deliberate exploitation of public trust and contributed to the erosion of confidence in the broader crypto market.
They maintained that a lengthy prison term was necessary to reflect the seriousness of the offense and deter similar misconduct.
The sentencing concludes one of the highest-profile criminal cases to emerge from the collapse of major crypto lending firms during the 2022 market downturn.
Celsius had attracted users with promises of double-digit yields on digital asset deposits but faced liquidity issues amid declining token prices and growing withdrawal demands.
Its bankruptcy triggered regulatory investigations and class-action lawsuits, leading to broader scrutiny of crypto lending practices.
Despite the sentencing concluding the federal prosecution, ex-Celsius CEO Alex Mashinsky continues to face legal proceedings concerning Celsius’s bankruptcy and related civil litigation, including a 180-page complaint in an adversary case.
