Celsius founder sentenced to 12 years in prison for fraud

Mashinsky pleaded guilty to committing financial fraud and manipulating the price of his own CEL token back in December last year. Judge John Koeltl called the businessman's actions extremely dangerous and emphasized that the sentence imposed is not able to compensate for the damage to the victims.

During the court hearing, one of the defrauded investors, Cameron Crews, spoke harshly about the former CEO: “He says he’s writing a book about gravity, but he still hasn’t realized the gravity of his actions.”

The defense sought a minimum sentence of one year, citing the defendant’s cooperation with the investigation. The prosecutor’s office insisted on 20 years in prison, and the creditors demanded a life sentence. Ultimately, the court settled on 12 years.

The investigation established that before the collapse of Celsius, Mashinsky misled clients, claiming that their funds were safe. At the same time, he concealed the existence of unsecured loans and artificially inflated the price of the CEL token, which allowed him to personally enrich himself by $48 million. As a result, more than 100 thousand users suffered losses totaling about $4.7 billion.

According to the agreement concluded with the prosecutor’s office, Mashinsky waived the right to appeal. He will begin serving his sentence in September in Otisville prison, where another defendant in the high-profile crypto case, Abraham Eisenberg, who was convicted of the attack on Mango Markets, is currently being held.

When his prison term is completed, Mashinsky will turn 72. Meanwhile, on November 28, 2024, Celsius representatives, who are handling the bankruptcy procedure, announced their intention to distribute $127 million among creditors.