Alex Mashinsky, the founder and former CEO of the now-defunct cryptocurrency lending platform Celsius, faces a 20-year prison sentence as the US Department of Justice (DOJ) seeks a severe penalty for his role in a multibillion-dollar fraud.
The DOJ on April 28 filed the government’s sentencing memorandum against Mashinsky, recommending a 20-year prison sentence for his fraudulent actions, which led to billions of dollars in losses for Celsius customers.
The 97-page memo mentioned that Celsius users were unable to access approximately $4.7 billion in crypto assets after the platform halted withdrawals on June 12, 2022.
“The Court should sentence Alexander Mashinsky to twenty years’ imprisonment as just punishment for his years-long campaign of lies and self-dealing that left in its wake billions in losses and thousands of victimized customers,” the DOJ stated.
Mashinsky’s personal benefit was $48 million
In addition to the investor losses, the DOJ noted that Mashinsky has personally profited from the fraudulent schemes in his role.
As part of his guilty plea in December 2024, Mashinsky admitted that he was the leader of the criminal activity at Celsius, that his crimes resulted in losses in excess of $550 million, and that he personally benefited more than $48 million, the DOJ said.
The DOJ highlighted that Mashinsky’s guilty plea showed that his crimes were “not the product of negligence, naivete, or bad luck,” but rather the result of “deliberate, calculated decisions to lie, deceive, and steal in pursuit of personal fortune.”
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The memorandum came days before Mashinsky’s sentencing hearing, which is scheduled for May 8, and will be presided over by US District Judge John Koeltl in the Southern District of New York.
Previously, former SEC Chair Jay Clayton, who was sworn in as interim US Attorney for Manhattan last week, shared in an April 23 letter that at least 200 victims filed statements in the case against Mashinsky.
Other Celsius co-founders
While Mashinsky emerged as a key figure in the Celsius fraud, others were involved in the massive cryptocurrency scam, including Shlomi Daniel Leon, who co-founded Celsius with Mashinsky in 2017.
Formerly the chief strategy officer (CSO) of Celsius, Leon quit his job in October 2022, months after Celsius’ collapse in June.
In July 2023, the Federal Trade Commission charged Leon, along with Mashinsky and another co-founder, Hanoch Goldstein, and issued a $4.7 billion fine against the bankrupt lender.
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