DOJ Requests 20-Year Prison Sentence for Celsius Founder Alex Mashinsky
Alex Mashinsky, founder of Celsius Network, faces a potential 20-year prison sentence as requested by the U.S. Department of Justice. The sentencing memo describes his actions as "deliberate, calculated" fraud resulting in nearly $7 billion in customer losses.
- Mashinsky pleaded guilty to misrepresenting the safety of customer deposits and manipulating the CEL token.
- Prosecutors claim he avoids responsibility and blames regulators and market conditions.
- Celsius peaked in 2021 with over $20 billion in customer assets and promised high yields with low risk.
- It engaged in risky trades and took uncollateralized loans while assuring customers their funds were safe.
- Mashinsky sold over $48 million worth of CEL at inflated prices, contradicting claims of holding his investments.
- The company filed for bankruptcy in July 2022, leaving $4.7 billion in customer funds trapped.
- Post-bankruptcy losses exceed $1 billion, with total estimated losses near $7 billion due to current crypto valuations.
- Prosecutors argue a lenient sentence would undermine legal accountability and could encourage misconduct among other crypto executives.
The sentencing is set for May 8.