Alex Mashinsky, the founder and former CEO of the now-bankrupt crypto lending firm Celsius, has criticized the US Department of Justice’s (DOJ) decision for a 20-year prison sentence, calling it as a “venom-laced” and disproportionate punishment that would amount to dying behind bars.
Celsius Collapse: Court vs Alex Mashinsky
Mashinsky, who is set to be sentenced on May 8, pleaded guilty in December 2024 to two of the seven charges initially brought against him, including commodities fraud and market manipulation involving Celsius’ native token, CEL. Prosecutors have alleged that he had earned $48 million by selling his CEL holdings before the company’s collapse in June 2022.
The DOJ agreed that Mashinsky’s actions were deliberate and deceitful, and they argued he deserved a lengthy sentence – that reflects the gravity of his crimes. The Celsius collapse ultimately left the company owing $4.7 billion to creditors after it stopped withdrawals, which prompted a Chapter 11 bankruptcy filing in July 2022.
However, Mashinsky’s legal team has pushed back, filing a response on May 5 urging a sentence of no more than 366 days. They claim the government is exaggerating his culpability, portraying him as a “predator” rather than acknowledging his status as a nonviolent, first-time offender with a clean three-decade business record.
“The government’s characterization turns every Celsius decision—regardless of who made it—into a weapon against Mr. Mashinsky,” his attorneys argued. They maintain that the harsh sentence request comes from Mashinsky’s refusal to fully accept the DOJ’s framing of his actions as fraudulent from the beginning.
In support of the case, the DOJ shared victim impact statements from several individuals who lost money in Celsius. The victims claimed they trusted Mashinsky’s repeated assurances that their funds were safe.
After Celsius’ collapse, a court-approved restructuring plan led to the return of $2.53 billion to more than 250,000 creditors by August 2024. On the other hand, former Celsius executive Roni Cohen-Pavon, who pleaded guilty to similar charges in 2023, is awaiting sentencing later this year.
In February, Mashinsky’s lawyers had requested a one-month postponement of ex Celsius CEO’s sentencing, initially scheduled for April 8, 2025, and had instead proposed a new date of May 8, 2025. The attorneys cited the complexity of the case, the severity of potential consequences, and the need to scrutinize the government’s evidence, which they claim often lacks citations and includes undisclosed witness statements.
Apart from Mashinsky’s case, Celsius was also in news recently after the firm fought with the court to reopen its $444 million claim against FTX, arguing that the decision made by Judge John T. Dorsey regarding the initial claim and amendment should be considered sufficient and valid.
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