Celsius CEO Sentenced to 12 Years Over $5 Billion Crypto Scandal

A major chapter in crypto’s legal reckoning closed this week as Alex Mashinsky, once a prominent name in digital lending, received a 12-year prison sentence.

The former Celsius Network CEO was found guilty of orchestrating fraudulent activities that contributed to one of the most damaging collapses in the industry’s history.

The fallout from Celsius’ implosion in mid-2022, which coincided with broader market turmoil and exposure to the Terra blockchain failure, left billions in customer funds stranded. Mashinsky, who had pitched Celsius as a safe and transparent lending platform, instead diverted user assets and manipulated CEL, the company’s native token, for personal and corporate gain.

Courtroom reports described a somber atmosphere during sentencing. Around 60 attendees listened as Mashinsky, visibly emotional, admitted to misleading investors. His legal team portrayed him as a first-time offender driven by ambition rather than greed. But the judge remained unconvinced, citing the magnitude of the financial harm inflicted on thousands of users.

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Although federal prosecutors had called for a harsher 20-year term, the final sentence reflected a degree of leniency — possibly due to Mashinsky’s cooperation and expressions of remorse. Still, with $5 billion in customer losses and creditor repayments still underway, the punishment is seen as a stern message to other crypto leaders.

Meanwhile, speculation is swirling over whether Mashinsky might seek a presidential pardon. Past examples — including clemency granted to BitMEX’s founders by former President Trump — and current reports of Binance’s CZ exploring similar avenues suggest that political intervention remains a wildcard in crypto-related prosecutions.

Alexander Stefanov