The U.S. Department of Justice (DOJ) has formally requested a 20-year prison sentence for Alex Mashinsky, the former CEO of collapsed crypto lending platform Celsius Network, for what prosecutors described as a “deliberate and calculated” scheme to defraud thousands of investors out of billions in cryptocurrency.
In a sentencing memo filed on April 28, federal prosecutors accused Mashinsky of orchestrating a “years-long campaign of lies and self-dealing” that ultimately led to over $550 million in investor losses and personal profits of $48 million. The DOJ argues that the severity of the fraud, combined with its impact on retail investors, merits one of the harshest sentences to date in the crypto space.
DOJ: This Was No Miscalculation — It Was Criminal Deception
Prosecutors pushed back on any narrative that Mashinsky’s actions were the result of poor judgment or market volatility. Instead, they labeled the conduct as intentionally deceptive, citing evidence that Mashinsky actively misled customers while offloading millions in CEL tokens at inflated prices — all while publicly claiming to hold and support the token.
“Mashinsky’s actions weren’t mistakes. They were methodical efforts to enrich himself while deceiving others,” the DOJ said in the filing.
At its peak in 2021, Celsius boasted more than $20 billion in assets under management, positioning itself as a safer and more lucrative alternative to banks. Behind the scenes, however, prosecutors say the company was engaged in risky trading, speculative loans, and price manipulation — all funded using customer deposits.
The platform ultimately filed for bankruptcy in July 2022, leaving nearly $4.7 billion in user funds frozen and inaccessible.
Victims Demand Justice: “Worse Than Madoff”
Calls for a maximum sentence have grown louder in recent weeks, as over 200 victim impact statements were submitted to the court. These statements paint a devastating picture of the fallout from Celsius’s collapse — including financial ruin, emotional trauma, and even suicides.
One victim compared Mashinsky to Bernie Madoff, urging the court to impose a life sentence. “He didn’t just take our money — he took our future,” the statement read.
Others described Mashinsky’s betrayal as deeply personal, citing the trust he built through podcasts, AMAs, and social media — all used, in hindsight, as tools to lure everyday investors into a false sense of security.
Sentencing Discrepancies Emerge
While prosecutors are seeking a full 20-year sentence, probation officers have recommended 15 years, and Mashinsky’s legal team is requesting just over one year in prison. The stark contrast highlights the tension between legal precedent, regulatory enforcement, and the public outcry for accountability in crypto-related crimes.
The case also comes amid a shift in crypto enforcement posture under President Trump’s administration, which has recently pardoned or commuted sentences for several high-profile individuals previously convicted of crypto-related offenses.
A Landmark Case for Crypto Accountability
Mashinsky’s sentencing is likely to be seen as a defining moment for crypto regulation and investor protection. If the DOJ’s request is granted, it would mark one of the longest sentences ever handed down in the cryptocurrency space — potentially setting a new bar for white-collar punishment in digital finance.
The sentencing hearing is expected to draw significant attention from both the crypto industry and regulators, as the outcome could influence how future fraud cases are prosecuted in an increasingly complex and volatile market.
