Alexander Mashinsky, the former CEO of Celsius Network, has been sentenced to 12 years in prison after pleading guilty to charges of securities and commodities fraud. His sentencing marks another major blow in the crypto industry’s ongoing reckoning with misconduct at the executive level.
At its peak in 2021, Celsius was one of the world’s largest crypto platforms, boasting $25 billion in assets and positioning itself as the safest place for crypto users to earn rewards, take out loans, and store digital assets. Promoting a mission to help customers “unbank” themselves, the company drew in hundreds of thousands of retail investors.
But according to prosecutors, Mashinsky ran a years-long scheme to defraud customers by artificially inflating the value of Celsius’s native token, CEL. He used hundreds of millions of dollars—at times customer funds—to purchase CEL on the open market, manipulating its price while misleading users into believing he wasn’t selling. In reality, Mashinsky personally profited by around $48 million from CEL sales.
The scheme unraveled in June 2022 when Celsius froze customer withdrawals, leaving users unable to access a staggering $4.7 billion. The company filed for bankruptcy just a month later.
U.S. Attorney Jay Clayton condemned the deception, stating: “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.”
Mashinsky now joins a growing list of disgraced crypto executives serving prison time, including FTX’s Sam Bankman-Fried, Binance’s Changpeng Zhao, and Terraform Labs’ Do Kwon.