U.S. Justice Dept. Seeks 20-Year Sentence for Celsius Founder Alex Mashinsky

Alex Mashinsky, the founder and former CEO of collapsed crypto lender Celsius Network, faces the prospect of spending the subsequent 20 years behind bars if the U.S. Department of Justice’s sentencing memo request is granted.

In the memo filed late Monday, the DOJ urged the courtroom to impose a 20-year jail sentence, calling the crimes a “deliberate, calculated” fraud that triggered practically $7 billion in buyer losses and left 1000’s financially devastated.

Mashinsky, who pleaded responsible in December to misrepresenting the security of buyer deposits and manipulating Celsius’s CEL token, “refuses to accept responsibility” for his crimes and continues to shift blame to regulators, market circumstances and even his victims, prosecutors mentioned.

“Mashinsky’s crimes were not the product of negligence, naivete, or bad luck,” they wrote. “They were the result of deliberate, calculated decisions to lie, deceive, and steal in pursuit of personal fortune.”

At its peak in 2021, Celsius managed greater than $20 billion in buyer crypto belongings. Mashinsky aggressively marketed the platform as a secure various to banks, promising excessive yields and low danger.

Prosecutors mentioned these guarantees had been a sham: Celsius took uncollateralized loans, made dangerous trades and secretly used buyer belongings to govern the value of its CEL token — all whereas publicly assuring clients their funds had been secure.

Mashinsky personally offered over $48 million value of CEL at inflated costs, prosecutors mentioned, whilst he informed clients he was “HODLing” alongside them. When Celsius collapsed out of business in July 2022, about $4.7 billion in buyer funds had been trapped.

Post-bankruptcy, clients had been left with a shortfall exceeding $1 billion. Adjusting for at the moment’s crypto costs post-2024’s “Trump-trade” rally, prosecutors estimate the entire loss is nearer to $7 billion.

Prosecutors warned that something lower than a big jail sentence would fail to replicate the gravity of Mashinsky’s conduct, undermine respect for the legislation, and ship the incorrect message to different crypto executives tempted to chase private enrichment on the expense of their clients.

Judge John G. Koeltl will sentence Mashinsky on May 8.