Celsius founder, Alex Mashinsky, has been sentenced to 12 years in prison for crypto fraud

Alex Mashinsky, the founder and former CEO of Celsius Network, has been sentenced to 12 years in federal prison for securities and commodities fraud.

The sentencing, delivered by U.S. District Judge John G. Koeltl in Manhattan, follows Mashinsky's guilty plea in December 2024 to charges related to defrauding customers and manipulating the value of Celsius's proprietary token, CEL

Mashinsky misled customers about the safety and profitability of their investments, falsely assuring them that their funds were secure while engaging in risky, uncollateralized loans and undisclosed financial bets. He also manipulated the price of the CEL token, profiting approximately $48 million from its sale.

Founded in 2017, Celsius Network attracted over $25 billion in customer assets by promising high returns on crypto deposits. However, the platform collapsed in 2022 amid a broader cryptocurrency market downturn, leaving customers unable to access their funds and revealing a $1.19 billion deficit .

In addition to the 12-year prison term, Mashinsky was sentenced to three years of supervised release and ordered to forfeit $48.4 million. He also faces ongoing civil lawsuits from regulatory bodies, including the SEC and FTC .

During the sentencing hearing, several victims testified about the devastating financial losses they suffered due to Mashinsky's actions. Some reports indicate that nearly 250 victims died before receiving justice or adequate compensation for their losses.

Mashinsky's case is a crackdown on fraudulent activities within the cryptocurrency industry that can increase transparency and accountability in this emerging financial sector.