Alexander Mashinsky , former CEO of Celsius Network , was sentenced to 12 years in prison on Thursday for orchestrating a massive fraud scheme that misled investors in the once-prominent cryptocurrency platform. The sentencing, held in Manhattan’s Southern District courtroom before U.S. District Judge John G. Koeltl, marks a steep fall for a figure once celebrated as a pioneer in the crypto industry.
Mashinsky, who pleaded guilty in December 2024 to commodities fraud and manipulating Celsius’s proprietary token, faced charges stemming from a multi-billion-dollar scheme. Prosecutors accused him of deceiving investors about the safety and profitability of Celsius’s yield-generating platform while secretly liquidating tens of millions in personal holdings. His legal woes began with a 2023 arrest on securities, commodities, and wire fraud charges, coinciding with Celsius’s $4.7 billion settlement with the Federal Trade Commission—one of the agency’s largest ever. The settlement hinges on Celsius returning remaining customer assets through ongoing bankruptcy proceedings.
The case, unfolding in courtroom 14A at 500 Pearl Street, adds Mashinsky to a growing list of crypto executives facing justice. His trajectory parallels that of FTX founder Sam Bankman-Fried , sentenced to 25 years in March 2024 for misappropriating billions in customer funds to prop up his hedge fund, Alameda Research, and fund a lavish lifestyle. Other fallen crypto titans include Binance’s Changpeng Zhao and Terraform Labs’ Do Kwon.
In related FTX developments, former Alameda Research head Caroline Ellison, who cooperated with prosecutors, received a two-year sentence, while FTX’s engineering chief Nishad Singh and co-founder Gary Wang avoided prison time. Ryan Salame, another FTX executive, was sentenced to 90 months. In a rare win for investors, FTX’s bankruptcy estate announced in May 2024 that nearly all customers would recover their funds, with additional compensation. Separately, a judge dismissed most claims against celebrities like Tom Brady and Stephen Curry for promoting FTX.
Mashinsky’s sentencing closes a chapter on one of the crypto industry’s most significant fraud cases, spotlighting the risks and regulatory scrutiny facing the sector.
Mashinsky, who pleaded guilty in December 2024 to commodities fraud and manipulating Celsius’s proprietary token, faced charges stemming from a multi-billion-dollar scheme. Prosecutors accused him of deceiving investors about the safety and profitability of Celsius’s yield-generating platform while secretly liquidating tens of millions in personal holdings. His legal woes began with a 2023 arrest on securities, commodities, and wire fraud charges, coinciding with Celsius’s $4.7 billion settlement with the Federal Trade Commission—one of the agency’s largest ever. The settlement hinges on Celsius returning remaining customer assets through ongoing bankruptcy proceedings.
The case, unfolding in courtroom 14A at 500 Pearl Street, adds Mashinsky to a growing list of crypto executives facing justice. His trajectory parallels that of FTX founder Sam Bankman-Fried , sentenced to 25 years in March 2024 for misappropriating billions in customer funds to prop up his hedge fund, Alameda Research, and fund a lavish lifestyle. Other fallen crypto titans include Binance’s Changpeng Zhao and Terraform Labs’ Do Kwon.
In related FTX developments, former Alameda Research head Caroline Ellison, who cooperated with prosecutors, received a two-year sentence, while FTX’s engineering chief Nishad Singh and co-founder Gary Wang avoided prison time. Ryan Salame, another FTX executive, was sentenced to 90 months. In a rare win for investors, FTX’s bankruptcy estate announced in May 2024 that nearly all customers would recover their funds, with additional compensation. Separately, a judge dismissed most claims against celebrities like Tom Brady and Stephen Curry for promoting FTX.
Mashinsky’s sentencing closes a chapter on one of the crypto industry’s most significant fraud cases, spotlighting the risks and regulatory scrutiny facing the sector.
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