Prosecutors Accuse Mashinsky of “Deliberate, Calculated” Fraud in Multibillion-Dollar Collapse
The U.S. Department of Justice (DOJ) is seeking a 20-year prison sentence for Alex Mashinsky, the disgraced founder and former CEO of failed crypto lending platform Celsius Network, accusing him of orchestrating a years-long fraud that led to billions in customer losses.
In a 97-page sentencing memorandum filed on April 28, federal prosecutors urged the court to impose a severe sentence, arguing that Mashinsky’s actions were intentional and calculated, not merely negligent or misguided.
“The Court should sentence Alexander Mashinsky to twenty years’ imprisonment as just punishment for his years-long campaign of lies and self-dealing that left in its wake billions in losses and thousands of victimized customers,” the filing states.
$4.7 Billion Frozen, $48 Million in Personal Gains
The DOJ revealed that Celsius users lost access to approximately $4.7 billion in crypto assets when the company froze withdrawals on June 12, 2022, triggering a chain reaction that ultimately led to its bankruptcy filing.
Mashinsky, who pleaded guilty in December 2024, admitted that:
-
He was the ringleader of the fraud
-
His actions caused losses exceeding $550 million
-
He personally gained over $48 million from the scheme
The DOJ emphasized that Mashinsky’s conduct involved systematic deception:
“His crimes were not the product of negligence, naivete, or bad luck,” the DOJ wrote.
“They were the result of deliberate, calculated decisions to lie, deceive, and steal in pursuit of personal fortune.”
Sentencing Set for May 8
Mashinsky’s sentencing hearing is scheduled for May 8, before U.S. District Judge John Koeltl in the Southern District of New York.
In a related development, interim U.S. Attorney for Manhattan Jay Clayton (former SEC Chair) noted in an April 23 letter that over 200 victim impact statements had been filed in the case, underscoring the widespread harm caused by Celsius’ collapse.
Other Celsius Executives Also Implicated
While Mashinsky has become the face of Celsius’ downfall, the DOJ’s investigation and subsequent Federal Trade Commission (FTC) enforcement actions have also implicated:
-
Shlomi Daniel Leon – Co-founder and former CSO of Celsius; left the firm in October 2022
-
Hanoch Goldstein – Another co-founder, also charged by the FTC
In July 2023, the FTC levied a $4.7 billion fine against Celsius and charged all three executives for misleading consumers and engaging in deceptive practices.
Final Thoughts: A Defining Crypto Fraud Case Nears Closure
The DOJ’s push for a 20-year sentence reflects growing regulatory urgency to hold crypto executives accountable for fraudulent behavior, especially as the sector matures and investor protections come under increased scrutiny.
Mashinsky’s sentencing could become a landmark moment in crypto enforcement history, signaling that deceptive practices in decentralized finance will not go unpunished — and that no figure is too prominent to escape accountability.
