Alexander Mashinsky, the founder and former Chief Executive Officer of Celsius Network LLC and their affiliated entities, was sentenced to 12 years for committing commodities fraud and securities fraud at Celsius.
Alexander Mashinsky previously pleaded guilty on December 3, 2024, before U.S. District Judge John G. Koeltl, who imposed the sentence on Thursday, May 8, 2025.
According to the allegations contained in the Indictment and statements made in public filings and in public court proceedings:
Celsius, a crypto asset platform, offered customers “rewards” on deposited assets, secured loans, and custody services. Marketing itself as the “safest place for your crypto,” Celsius encouraged customers to “unbank” themselves by transferring crypto assets to its platform. Celsius’s primary offering, “Earn” program, promised to deploy customer assets to generate investment returns. Celsius also provided “Custody” and “Borrow” programs, the latter allowing customers to obtain loans by posting crypto assets as collateral. Mashinsky, as CEO, directly marketed Celsius to retail customers globally. Throughout his tenure, he repeatedly misrepresented key aspects of Celsius’s business and finances to attract customers and retain their assets. His false claims covered the safety of Celsius’s yield-generating activities, its profitability, the sustainability of high rewards rates, and the risks associated with depositing crypto assets on the platform.
As Mashinsky portrayed Celsius as secure, the platform grew exponentially. By the fall of 2021, Celsius had become one of the largest crypto platforms in the world, holding approximately $25 billion in assets at its peak.
Mashinsky and others orchestrated a yearslong scheme to mislead customers about Celsius’s proprietary crypto token CEL. They manipulated CEL’s price by spending hundreds of millions purchasing it on the open market to artificially inflate its value. At times, they used customer deposits to fund these market purchases, without disclosing that to customers. Without aggressive manipulation, CEL’s price would have been significantly lower.
To further the manipulation scheme, Mashinsky repeatedly made false public statements about Celsius’s market activity and role in supporting and inflating CEL’s. In some instances, he and other executives personally purchased CEL to artificially support its value. The artificial price inflation allowed him to profit approximately $48 million from his own sales of CEL. He publicly claimed he was not selling CEL, while actually selling large quantities, sometimes to Celsius itself.
Before Celsius halted customer withdrawals on June 12, 2022, Mashinsky continued assuring customers of Celsius’s strong financial position and liquidity. Meanwhile, he withdrew $8 million worth of his own non-CEL assets from Celsius.
When Celsius announced it was halting customer withdrawals, hundreds of thousands of Celsius customers had $4.7 billion in inaccessible assets on the platform. Celsius filed for bankruptcy on July 13, 2022.
In addition to the prison term, Mashinsky, 59, of New York, New York, was sentenced to three years of supervised release and ordered to pay a $50,000 fine and forfeiture of $48,393,446.
