Celsius Founder Gets 12 Years In Prison For Misleading Investors – Ordered to Pay $48M

Alex Mashinsky, the founder and former chief executive of Celsius Network, was sentenced Thursday to 12 years in prison for defrauding investors in connection with the collapse of the crypto lending platform.

The sentence, handed down by U.S. District Judge John Koeltl in Manhattan, includes three years of supervised release and the forfeiture of $48.4 million. It ranks among the longest prison terms tied to the 2022 crypto market crash.

Mashinsky pleaded guilty in December to securities fraud and commodities fraud. Prosecutors said he misled customers about Celsius's safety and manipulated the company’s CEL token to enrich himself, ultimately profiting by more than $48 million.

They argued for a prison term of at least 20 years, calling the sentence a “just punishment” for victimizing thousands of investors and contributing to billions of dollars in losses.

"The case for tokenization and the use of digital assets is strong, but it is not a license to deceive," U.S. Attorney Jay Clayton said in a statement following the sentencing.

Mashinsky had requested a one-year and one-day term, expressing remorse and a desire to make amends to his family and Celsius customers.

The sentencing adds to a growing list of high-profile criminal convictions stemming from crypto’s 2022 unraveling. Sam Bankman-Fried, the founder of FTX, is currently serving a 25-year sentence for fraud. He is appealing his conviction.

In addition to the criminal trial, Mashinsky faces civil litigation from multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Federal Trade Commission, and New York Attorney General Letitia James.

The cryptocurrency market has gained 1.5% in the past 24 hours, crossing a market capitalization of $3.3 trillion, according to CoinGecko.

Bitcoin (BTC) has remained over $103,000 for the first time since January. Its price has gained 1.8% in the past 24 hours. 

Meanwhile, the second-largest cryptocurrency, Ethereum (ETH), has surged over 14% in the last 24 hours. Ether’s price is currently stable above the $2,300 mark.

XRP (XRP), Ripple’s token, gained on news that Ripple Labs reached a tentative $50 million settlement with the SEC over a $125 million fine, pending court approval. XRP’s price has gained over 5% in the last 24 hours to trade at $2.36.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read also: Alphabet’s Google Reaches $50M Settlement Over Claims of Systemic Racial Discrimination Against Black Employees