Alex Mashinsky, the founder and former CEO of the cryptocurrency lending company Celsius, criticized the U.S. government's request for a 20-year sentence, calling it a severe punishment akin to life imprisonment.
Celsius filed for bankruptcy protection in July 2022, having halted user withdrawals due to unstable market conditions and owing $4.7 billion in debt. The U.S. Department of Justice requested the court to sentence 59-year-old Mashinsky to at least 20 years in prison for misleading Celsius users and profiting from manipulating its native token CEL price, in the sentencing hearing on May 8.
Mashinsky's legal team argued in a memorandum submitted to the New York District Court on May 5 that Mashinsky's sentence should not exceed 366 days, as the Department of Justice did not consider that he was a first-time offender with no record of violence and had no adverse records in his 30-year business career.
"The hostile sentencing document submitted by the government recasts this case as a narrative of predators intending to target victims, harm them, and steal their money," the lawyer stated. "They ultimately suggested a sentence for a first-time offender with no record of violence, who has pleaded guilty and taken responsibility, equivalent to letting him die in prison."
As part of a plea agreement, Mashinsky admitted to two charges in December 2024: commodity fraud and manipulation of the CEL price, profiting $48 million from selling his tokens before Celsius collapsed in June 2022. The prosecutor initially filed seven charges in July 2023.
In the sentencing request on April 28, the Department of Justice stated that Mashinsky's guilty plea indicates that his crimes were intentional, premeditated fraud and theft. The prosecutor also submitted statements from hundreds of victims who lost money due to the collapse of Celsius.
In November 2023, the U.S. bankruptcy court approved Celsius's restructuring plan to repay customers and is set to repay $2.53 billion to 251,000 creditors in August 2024.
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