U.S. Justice Department Requests 20-Year Prison Term for Celsius Founder Alex Mashinsky

Alex Mashinsky, the founder and former CEO of the collapsed crypto lender Celsius Network, could face up to two decades in prison if the U.S. Department of Justice’s sentencing memo is approved. In the memo filed late Monday, the DOJ requested a 20-year prison sentence, describing the crimes as a “deliberate, calculated” fraud that resulted in nearly $7 billion in losses for customers, leaving thousands in financial distress.

Mashinsky, who pleaded guilty in December to misrepresenting the safety of customer deposits and manipulating Celsius’s CEL token, “refuses to accept responsibility” for his actions and continues to deflect blame onto regulators, market conditions, and even the victims, according to prosecutors.

“Mashinsky’s crimes were not the product of negligence, naivete, or bad luck,” they stated. “They were the result of deliberate, calculated decisions to lie, deceive, and steal in pursuit of personal fortune.”

At its peak in 2021, Celsius managed over $20 billion in customer crypto assets. Mashinsky aggressively marketed the platform as a secure alternative to banks, promising high yields with low risk. Prosecutors argued these promises were deceptive: Celsius made uncollateralized loans, engaged in risky trading, and secretly utilized customer assets to manipulate the price of its CEL token—all while assuring customers that their funds were secure.

Mashinsky personally sold over $48 million worth of CEL at inflated prices, even as he claimed to be “HODLing” alongside customers. When Celsius filed for bankruptcy in July 2022, approximately $4.7 billion in customer funds were trapped.

Following the bankruptcy, customers faced a shortfall exceeding $1 billion. Adjusted for current crypto prices following 2024’s market trends, prosecutors estimate the total loss approaches $7 billion.

Prosecutors cautioned that failing to impose a significant prison sentence would not adequately reflect the severity of Mashinsky’s actions, undermine respect for the law, and send a troubling message to other crypto executives who might consider prioritizing personal gain over the welfare of their customers.

Judge John G. Koeltl is set to sentence Mashinsky on May 8.