Cryptocurrency CEO Sentenced to Prison

The sentencing of cryptocurrency swindler Alex Mashinsky provided investors with yet another window into the extensive corruption and criminality that infects the world of cybercurrencies. Mashinsky, former Chief Executive Officer of Celsius Network, which filed for bankruptcy protection in 2022, was sentenced to 12 years in prison and ordered to forfeit more than $48 million in illegal profits.

“Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets.  In the end, Mashinsky made tens of millions of dollars while his customers lost billions,” said Jay Clayton, U.S. Attorney for the Southern District of New York.

Mashinsky misled investors about Celsius’ business and finances to attract customer assets, and then manipulated the price of Celsius’ proprietary crypto token CEL, spending hundreds of millions of dollars to artificially inflate its price, often using customer funds to do so without their knowledge. While claiming he was not selling CEL, in fact Mashinsky generated millions of dollars through his illicit sales of the token.

Prosecutors submitted numerous statements from Celsius victims, describing how the cybercurrency bank had lost their digital assets. “Alex Mashinsky has robbed my family of its best opportunity to be self sufficient after I’m gone. Losing my [bitcoin] to this conman will always haunt me,” wrote one client.

Celsius Network was a leading cybercurrency lender which hid the fact that it was gambling with clients’ money, betting on cryptocurrency prices and making loans without holding collateral.

Mashinsky assured Celsius customers that their deposits were safe until just before the company prevented them from withdrawing funds in the summer of 2022. In December of 2024, Mashinsky pled guilty to commodities fraud and a scheme to manipulate the price of the firm’s proprietary crypto token.