The U.S. Department of Justice (DOJ) is seeking a 20-year sentence for Alex Mashinsky, former CEO of Celsius Network, over what it described as “deliberate and calculated” fraud. In a court filing on April 28, prosecutors accused Mashinsky of leading a multi-year scheme that left $4.7 billion in customer crypto locked when Celsius froze withdrawals in June 2022.
The DOJ said this was not a case of market failure. Instead, Mashinsky’s actions were intentional and aimed at misleading investors. Celsius, once claiming to manage $20 billion in crypto, promoted itself as a secure alternative to banks.
Behind the scenes, however, the DOJ stated that Celsius used customer funds to make risky loans, place speculative trades, and manipulate the value of its own CEL token.
Alex Mashinsky Admitted to $550 Million Fraud, Gained $48 Million
Mashinsky pleaded guilty in December 2024. The DOJ said he admitted to leading fraudulent operations that caused $550 million in losses. According to the court documents, Mashinsky made at least $48 million from these actions, mostly through the secret sale of CEL tokens at inflated prices.
While publicly claiming he held onto his tokens, Mashinsky was selling them in the background. Prosecutors emphasized that these were not accidental missteps. They were planned decisions to mislead users and personally benefit.
Celsius filed for bankruptcy in July 2022, with nearly $4.7 billion in user crypto frozen on the platform. The DOJ said Mashinsky’s sentence should reflect the scale of the fraud and the financial damage to thousands of retail investors.
Celsius Victims Submitted Over 200 Statements Urging Maximum Sentence
More than 200 Celsius victims sent written statements to the court ahead of sentencing. Most called for the harshest sentence possible. Some said they lost retirement savings. Others shared stories of emotional distress. At least one letter blamed Mashinsky for pushing victims to suicide.
One investor compared Alex Mashinsky to Bernie Madoff, who led one of the largest Ponzi schemes in U.S. history. Victims said they felt betrayed by the trust they placed in Celsius Network and its CEO.
While Mashinsky’s legal team asked for a sentence just over one year, probation officers suggested a 15-year prison term. Prosecutors rejected any leniency, stating that the fraud was extensive, planned, and caused global financial harm.
DOJ Action Follows Shift in Crypto Enforcement Under Trump Administration
The DOJ filed its sentencing request during a broader change in crypto-related enforcement. Under the Trump administration, enforcement activity has eased, and some high-profile crypto individuals have received pardons.
Despite the changing environment, the DOJ said a 20-year sentence for Alex Mashinsky was necessary. The agency cited the size of investor losses, the calculated nature of the actions, and the ongoing impact on trust in crypto lending platforms.
The Celsius CEO Alex Mashinsky case remains one of the highest-profile crypto fraud cases since 2022. The DOJ emphasized that a firm sentence would reflect the seriousness of the misconduct.
