Celsius: Former CEO Alexander Mashinsky Sentenced to 12 Years for Cryptocurrency Fraud
- Alexander Mashinsky convicted of cryptocurrency fraud
- Celsius CEO embezzled funds and misled investors
- US court tightens rules against crypto fraud
Former Celsius Network CEO Alexander Mashinsky has been sentenced to 12 years in prison after pleading guilty to leading a multi-billion dollar cryptocurrency lending fraud scheme. The conviction was upheld by the US Attorney’s Office, which highlighted the impact of the scam on retail investors.
Mashinsky was initially arrested in July 2023, charged by the U.S. Securities and Exchange Commission (SEC) with securities law violations. In December 2024, he pleaded guilty to the Department of Justice (DOJ) to deceiving Celsius users by presenting the company as a safe and profitable platform, while diverting funds for personal gain.
According to prosecutors, Mashinsky made promises of security superior to that offered by traditional banks, attracting a broad user base. However, allegations suggest that he invested clients' funds in high-risk transactions with the aim of enriching himself.
U.S. Attorney Jay Clayton stated:
“Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank, when in reality he used those assets to make risky bets and line his own pockets.”
According to Clayton, Mashinsky's actions resulted in billions of dollars in losses for Celsius' clients, while he accumulated tens of millions of dollars in profits. The Federal Court of the Southern District of New York (SDNY) reinforced that even in the cryptocurrency sector, anti-fraud laws remain valid and will be strictly enforced.
The sentence came even after the defense's request for clemency, which suggested only one year in prison. The court understood that the gravity of the case required severe punishment as a way to protect the cryptocurrency market and hold misconduct accountable.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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