Celsius Founder Faces 20-Year Sentence as DOJ Cites ‘Deliberate Fraud’
Alex Mashinsky’s Crypto Empire Crumbles Under Weight of $4.7B Collapse
NEW YORK — The U.S. Department of Justice has requested a 20-year prison sentence for Alex Mashinsky, the disgraced founder and former CEO of collapsed crypto lender Celsius, citing a sweeping fraud scheme that cost investors billions and enriched him personally by tens of millions.
In a 97-page sentencing memorandum filed on April 28, the DOJ condemned Mashinsky’s actions as calculated and deceptive, not accidental or negligent. “The Court should sentence Alexander Mashinsky to twenty years’ imprisonment as just punishment for his years-long campaign of lies and self-dealing,” federal prosecutors wrote.
A Web of Lies and $48 Million in Personal Gains
Mashinsky’s guilty plea in December 2024 confirmed what many Celsius users had long suspected: that the platform’s failure wasn’t merely bad business—it was the result of intentional fraud.
According to the DOJ, Mashinsky’s misconduct led to over $550 million in losses, and he personally pocketed more than $48 million. The scheme culminated in June 2022, when Celsius froze withdrawals, trapping $4.7 billion in user crypto assets.
The government’s filing made clear that Mashinsky’s actions were part of a “deliberate, calculated” pattern designed to enrich himself while misleading customers about the platform’s financial health.
Sentencing Scheduled for May 8
Mashinsky’s sentencing hearing is set for May 8, with U.S. District Judge John Koeltl presiding over the proceedings in the Southern District of New York. The DOJ’s filing comes just days after at least 200 victims submitted personal statements to the court, detailing the devastating impact of Celsius’ collapse.
Not a Lone Operator: Other Founders Also Named
While Mashinsky is the face of the scandal, Shlomi Daniel Leon, a co-founder and former Chief Strategy Officer of Celsius, also played a significant role. Leon resigned in October 2022, months after the company filed for bankruptcy.
In July 2023, the Federal Trade Commission charged Leon, Mashinsky, and another co-founder, Hanoch Goldstein, for their roles in the scheme. The FTC also issued a $4.7 billion fine against Celsius, one of the largest in crypto enforcement history.
A Reckoning for Crypto’s Wild West Era
The Mashinsky case is shaping up to be one of the most consequential legal reckonings in the post-crypto boom era. It signals a firm line drawn by regulators against executives who exploited market hype to lure retail investors into unsustainable financial models.
As the sentencing approaches, the outcome could set a precedent for how U.S. courts handle white-collar crime in the cryptocurrency sector—a space long plagued by opacity and unregulated ambition.
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