Celsius Founder Alex Mashinsky Sentenced to Prison for Crypto Fraud

Alex Mashinsky, founder and former chief of bankruptcy and cryptocurrency lender Celsius Network, was sentenced to 12 years in jail after being found guilty of securities and commodities fraud.

U.S. District Judge John Koelti in Manhattan assessed Mashinsky’s sentence. He has been involved in criminal cases since the 2022 breakdown in cryptocurrency markets. Federal Prosecutors said Mashinsky misled customers about Celsius’ safety and artificially increased the value of Celsius’ proprietary token CEI. Sam Bankman, who led the FTX exchange, is also getting a 25-year prison sentence after being convicted of fraud.

Cryptocurrency lenders have guaranteed depositors easy loan availability at high interest rates while lending tokens to institutional investors, hoping to profit from the difference. However, Celsius offered 17% interest on some deposits but had a $1.19 billion balance sheet deficit when it tried to seek protection from bankruptcy. Mashinsky defrauded thousands of people and caused a loss of a billion dollars, and he also kept more than $48 million for his personal use.