Celsius CEO Alex Mashinsky sentenced to 12 years in crypto fraud case

Alexander Mashinsky, founder and former CEO of the failed cryptocurrency platform Celsius Network, was sentenced to 12 years in prison on Thursday after pleading guilty to federal fraud charges. A plea agreement had called for up to 30 years.

Mashinsky acknowledged illegally manipulating the price of Celsius’ proprietary token while secretly selling his own tokens at inflated prices. He made $48 million off the scheme before Celsius filed for bankruptcy in 2022. 

By that time, Celsius had become one of the largest crypto platforms in the world, with around $25 billion in assets. Customers considered the business a modern bank where they could safely deposit crypto assets and earn interest.

But Mashinsky admitted to making statements that gave them false comfort, including suggesting the business had been approved by regulators. Prosecutors said Mashinsky used slogans like “Unbank Yourself” to persuade customers to invest — then used their deposits to pay for market purchases of the Celsius token to prop up its value.

"I accept full responsibility for my actions," Mashinsky told the court in December as he pleaded guilty to two of the seven counts he was charged with. 

His downfall mirrors that of FTX's Sam Bankman-Fried, who was convicted of stealing around $8 billion from customers and sentenced to 25 years in prison. 

Other crypto bosses who have been in trouble since the industry's 2022 collapse include Binance’s Changpeng Zhao, who was sentenced last year to four months in prison after pleading guilty to charges of enabling money laundering.

In January, Do Kwon of Terraform Labs pleaded not guilty to fraud charges. Prosecutors say he was involved in a scheme to deceive investors in order to fraudulently inflate the value of Terraform’s stablecoin.

Senate Democrats on Thursday stopped a Trump-backed bill to regulate stablecoins, saying it needed stronger provisions for anti-money laundering, foreign issuers and national security. They also worried it could further enrich Trump, who is affiliated with a stablecoin business that could generate tens of millions of dollars a year in revenue for his family and their business partners.