New York, NY – Alex Mashinsky, the founder and former CEO of the Celsius Network crypto loan platform was sentenced to 12 years in prison Thursday for fraud.
Judge John Koeltl from the South District of New York (SDNY) pronounced the sentence, claiming that the 12 years – composed of a 120 -month sentence which will be purged simultaneously with a separate 144 -month sentence for the two accusations to which Mashinsky pleaded guilty – reflected the “extremely serious” crimes of Mashinsky. The penalty divides the difference between the simple year and a day in prison requested by its defense team and the 20 years suggested by the prosecutors. He also agreed to lose $ 48 million and several real estate.
“Whatever sentence, the penalty will not cure monetary or psychological damage caused to the victims,” said Koeltl.
Before the collapse of Celsius in 2022, Mashinsky lied several times to investors on the security of their deposits. He falsely claimed that Celsius had a regulatory approval, he insisted that the platform did not make non -collateralized loans when, in fact, he did, and he lied to the sale of his CEL tokens while manipulating the price of his own financial gain – making more than $ 48 million in CEL profits, said prosecutors. The bad leadership and the autonomy of Mashinsky have failed Celsius, leaving a gaping hole of $ 1.2 billion – which, according to prosecutors, is more like $ 7 billion at today’s prices – in the business of the company.
When Celsius collapsed, more than 100,000 creditors claimed to have lost 4.7 billion collective dollars according to the first bankruptcy documents.
“Alexander Mashinsky has targeted retail investors with promises he would keep their” digital assets “safer than a bank, when he in fact used these assets to place risky bets and to align his own pockets,” said American lawyer Jay Clayton in a statement. “In the end, Mashinsky won tens of millions of dollars while its customers have lost billions.
On Thursday, in their presale documents and their testimonies in court, Mashinsky and his lawyers tried to minimize the role of the CEO in fraud. His lawyers told court that Mashinsky “does not have a malicious bone in his body” and that the government’s attempt to characterize it as the architect of a fraud program was “a hoax”.
Mashinsky cried like his lawyer, Marc Mukasey, told the court of his personal characteristics – including his military service in the Israeli army, his alleged history of hiring of homeless to work in his various societies and, confusing, on his work in progress on a book of non -fiction on gravity since his arrest – that he has urged the judge to consider the factors Mashinsky conviction. When Mashinsky himself spoke to the judge, he cried intermittently when he apologized for the damage caused to his victims.
“As a person who came from nothing, I recognize how difficult people work, save and invest in the crypto,” said Mashinsky. “I respectfully ask victims forgiveness and I apologize to everyone for my mistakes. I’m really sorry. “
Six of these victims spoke in court on Thursday, detailing their pain and suffering in the aftermath of the collapse of Celsius.
A victim, Cameron Crewes, told court that Mashinsky and his lawyer on his conduct were a “horrible minimization” of the damage he caused to Celsius.
“The defense says that he is working on a new book on gravity, but he does not seem to understand the seriousness of the situation,” said Crewes, adding that at least 231 Celsius creditors have died since the collapse of the platform and will never be whole.
Another creditor, Hollis Waite, described how he was “terribly prepared” to send his two young children to university after losing an important part of his economies to Celsius. Another, Hugh Mitton, told court that he had lost sleep, his mental health and his time since the collapse of Celsius. Mitton challenged the characterization of the lawyers of Mashinsky that he voluntarily missed the university diploma of his son, also on Thursday, in order to attend his conviction and take responsibility for his crimes.
“”[He] Do not mention all people who can no longer afford to send their children to university, ”said Mitton.
The victims and the prosecutors stressed the fact that Mashinsky does not take responsibility for the actions that led to the fall of Celsius, as well as the financial gain that he and his wife Krissy made Celsius, even during his collapse and the bankruptcy which followed bankruptcy – after Krissy, Krissy sold t -shirts saying ” Yourself “slogan”.
Mashinsky was in the face of Pierre listening to the testimony of his victims. When the judge pronounced the trouble, he seemed really surprised, saying:
“I think that even if I am here to assume responsibility, I take responsibility for a thousand employees. None of them came forward to say what they did. That’s all, your honor. “
As part of his advocacy agreement, Mashinsky is unable to call on her sentence. He was ordered to self-assess in prison to start his sentence in September. His lawyers asked that he be authorized to serve his sentence to FCI Otisville, an average security prison in New York who is also a temporary home for the operator of the mango markets Avi Eisenberg, who was recently sentenced to four years in prison for the possession of juvenile pornography.
If he purges all of his sentence, Mashinsky will be 72 years old at his release.
