NEW YORK, NY — Alex Mashinsky, the founder and former CEO of bankrupt crypto lending platform Celsius Network, was sentenced to 12 years in prison on Thursday for fraud.

Judge John Koeltl of the Southern District of New York (SDNY) handed down the sentence, saying the 12 years — composed of a 120-month sentence to be served concurrently with a separate 144-month sentence for the two charges Mashinsky pled guilty to — split the difference between the defense and prosecution's sentencing memos.

Before Celsius’ collapse in 2022, Mashinsky repeatedly lied to investors about the safety of their deposits. He falsely claimed that Celsius had regulatory approval, he insisted that the platform did not make uncollateralized loans when, in fact, it did, and he lied about selling his CEL tokens while manipulating the price for his own financial gain. Mashinsky’s poor leadership and self-dealing drove Celsius into bankruptcy, leaving a gaping $1.2 billion hole — which prosecutors said is more like $7 billion at today’s prices — in the company’s balance sheet.

Mashinsky was arrested in July 2023 on a seven-count indictment, but eventually reached a plea deal with prosecutors that saw him plead guilty to one count each of securities and commodities fraud last December. As part of his plea deal, prosecutors agreed to a maximum sentence of 30 years in prison, but suggested a 20-year sentence in their sentencing memorandum filed with the court last month.

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

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