Celsius’ Mashinsky lashes out at ‘death-in-prison sentence’

Alex Mashinsky, the founder and former CEO of bankrupt crypto lending platform Celsius, has blasted the government's 20-year “venom-laced” sentence request, declaring it a “death-in-prison sentence.”

The US Department of Justice  requested Mashinsky receive at least 20 years  behind bars in the May 8 sentencing for his role in misleading Celsius users and profiting from the  price manipulation  of Celsius , which would make the 59-year-old 79 if he serves the whole sentence.

Lawyers acting for Mashinsky  argued  in a May 5 reply memorandum filed in a New York district court that he should receive no more than 366 days, because the DOJ hasn't taken into account his status as a nonviolent first-time offender with a previously unblemished 30-year history in business.  

“The government's venom-laced submission recasts this case as one involving a predator with an intent to target victims, harm them, and steal their money,” they said.

“It concludes by recommending that a first time, nonviolent offender who pled guilty and accepts responsibility receive a death-in-prison sentence.”

    Lawyers acting for Mashinsky argue the DOJ has ignored their client's background in its sentencing request. Source: Court Listener

Mashinsky pleaded guilty to two out of seven charges 

As part of a plea agreement, Mashinsky  pleaded guilty in December 2024  to commodities fraud and manipulating the price of CEL, earning $48 million by selling his holdings before Celsius collapsed in June 2022.  Prosecutors initially filed seven charges  in July 2023.

Lawyers acting for Mashinsky allege the DOJ’s push for a 20-year sentence is because their client is unwilling to “capitulate to the government’s exaggerated characterizations of his actions,” specifically that he was a “fraud from the get-go.”

“Alex is inserted as the scapegoat for every corporate action, every group decision, every unanimous vote, every market fluctuation, and every employee's watercooler speculation,” they said.

As part of its April 28 sentencing request, the DOJ said Mashinsky’s guilty plea showed that his crimes were deliberate, calculated decisions to lie, deceive and steal.

Days earlier on April 23, US federal prosecutors also  filed statements from hundreds of victims  who lost money due to the Celsius collapse. They detailed how some had entrusted their life savings to the protocol, believing Mashinsky’s assurances that it was safe.

Celsius filed for Chapter 11 bankruptcy on July 13, 2022, owing $4.7 billion to creditors after halting withdrawals in June, citing volatile market conditions.

In November 2023, a US bankruptcy court approved Celsius' restructuring plan to repay customers, and in  August 2024, $2.53 billion was paid  to 251,000 creditors.

Former Celsius chief revenue officer Roni Cohen-Pavon also pleaded guilty in September 2023 to similar charges, but his  Dec. 11 sentencing has been delayed  until after Mashinsky is sentenced.