The U.S. Department of Justice (DOJ) is advocating for a 20-year prison sentence for Alex Mashinsky, the former CEO of the now-insolvent cryptocurrency lending platform Celsius. Prosecutors allege that Mashinsky orchestrated a “years-long campaign of lies and self-dealing” that defrauded numerous investors.
In a sentencing memorandum submitted on April 28, federal prosecutors emphasized Mashinsky’s pivotal role in the scheme, noting that he contributed to a situation where customers could not access nearly $4.7 billion in cryptocurrency after Celsius halted withdrawals in June 2022.
The DOJ characterized the fraudulent activities as intentional and calculated, asserting that they were not merely the result of poor judgment or adverse market conditions.
Mashinsky Acknowledged $550M Fraud, Profited $48M, DOJ Claims
As outlined in the court document, Mashinsky confessed during his December 2024 guilty plea to leading fraudulent operations that resulted in over $550 million in losses while personally benefitting by at least $48 million.
Prosecutors maintained that his conduct was deliberate, highlighting that Mashinsky engaged in “intentional efforts to deceive and steal” to enhance his wealth at the expense of retail investors.
At its peak in 2021, Celsius asserted it managed over $20 billion in crypto assets, presenting itself as a reliable and lucrative alternative to traditional banking.
However, the DOJ revealed that behind its public facade, Celsius engaged in high-risk lending practices, speculative trading, and utilized customer funds to manipulate the price of its CEL token.
DOJ Seeks 20-Year Sentence for Celsius Founder Alex Mashinsky
Federal prosecutors called Mashinsky the architect of a “years-long campaign of lies and self-dealing” that left customers with billions in losses. pic.twitter.com/bppSCUCPim
— Bingo666. (@Bingo666__) April 29, 2025
Despite reassurances to users that he was retaining his CEL tokens, Mashinsky had actually sold more than $48 million worth at inflated prices.
Celsius filed for bankruptcy in July 2022, resulting in approximately $4.7 billion in user assets being rendered inaccessible on the platform.
The DOJ argues that Mashinsky’s prison sentence should reflect the considerable damage inflicted on investors and act as a deterrent against similar misconduct within the cryptocurrency sector.
Celsius Victims Push for Severe Sentencing of Mashinsky
In the previous week, disillusioned investors from around the globe have urged a federal judge to impose the maximum sentence on Mashinsky in light of his involvement in the company’s 2022 downfall.
More than 200 victim impact statements were submitted to the court, with many calling for a stringent penalty due to the financial devastation, emotional anguish, and shattered aspirations caused by the collapse.
One victim likened Mashinsky to Bernie Madoff, advocating for a life sentence and linking his actions to pushing some investors toward suicide.
While Mashinsky’s legal team has requested a sentence of slightly over a year, probation officers have suggested a 15-year term.
This push for a significant sentence occurs amid a shifting landscape regarding cryptocurrency enforcement following the Trump administration’s recent pardons of several prominent figures in the crypto space.
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