Celsius Network’s Alex Mashinsky sentenced to 12 years for crypto fraud

The founder of Celsius Network Alex Mashinsky was finally sentenced to 12 years in prison for crypto fraud. Mashinsky avoided a longer 20-year sentence, despite calls for the longer term due to the damaging bankruptcy of Celsius Network and his unrepentant behavior. 

Alex Mashinsky was sentenced to 12 years in prison for defrauding hundreds of thousands of investors. Celsius Network promised high returns, but wiped out over $7B in value. 

Mashinsky faced up to 20 years in prison based on arguments of deliberate fraud and an unrepentant attitude. The founder of Celsius sought just a year-long sentence for his financial crimes. The final sentencing of 12 years includes charges of commodity and securities fraud. Mashinsky pleaded guilty in December 2024, leaving the court to determine the final length of the sentence. At one point, the plea was linked to a potential life sentence, capped at 30 years, court documents show.

The sentence will be effective from September 12, as Mashinsky requested a delay to attend his daughter’s wedding, which was granted by Judge Koetl at the District Court of New York. The sentence will be served at the Federal Correctional Institution, Otisville.

The emotions ran high during the sentencing, as Celsius was targeting retail investors and wiped out the personal savings of multiple depositors. Mashinsky himself reportedly cried during the final arguments and sentencing. 

We are now halfway through sentencing for Celsius founder Alex Mashinsky

Here's all the drama from inside the courtroom, including when Mashinsky started to cry as he addressed the court 🧵pic.twitter.com/8WcWMqGgO9

— Zack Guzmán (@zGuz) May 8, 2025

Celsius Network stopped withdrawals in June 2022, later also reporting exposure to the FTX exchange. On July 13, the company filed for Chapter 11 bankruptcy protection, ending the procedure in January 2024. 

Reportedly, Celsius had up to $444M in assets on the bankrupt exchange. The chaos and insolvency procedures led to the prolonged bear market in 2022-2023, which wiped out even more investor value. 

Celsius Network raised red flags just before the first signs of insolvency, though Mashinsky denied it until the last day. Throughout the trial, Mashinsky still claimed he acted in good faith, though the defense still pointed out unrepentant statements, minimizing the gravity of the Celsius fraud. 

celsius paused customer withdrawals the day after this tweet accusing me of being paid to fud the company

today, alex mashinsky was sentenced to 12 years in jail for fraud pic.twitter.com/PzPx7C2TUc

— Mike Dudas (@mdudas) May 8, 2025

The platform was an early version of a crypto lending protocol, which was centralized and depended on constant inflows to service the high promised interest rates. 

The platform defrauded even high-profile crypto influencers, leading even more crypto users to root for the maximum possible sentence and eventual compensation. 

Mashinsky to forfeit personal wealth and properties

To compensate Celsius Network depositors, Mashinsky will forfeit $48M of his personal funds and nine real estate properties. 

Mashinsky’s defense admits to a loss of $590M, though other estimates show Celsius owes as much as $4.7B. Unfortunately, the platform lacks the funds to repay all creditors and has only distributed around $127M in the second phase of its compensation program. Total losses are estimated at up to $7B, including the lost value from the project’s native token.

The trial also called forward over 200 personal statements of wealth loss due to involvement with Celsius Network. Prosecutors pointed out the damaging effect of wiping out personal life savings, while demanding a maximum sentence. 

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