Alex Mashinsky, the founder and former CEO of the Celsius Network (CEL) lending protocol, was sentenced to 12 years in prison on Thursday, May 8. U.S. District Judge John G. Koeltl in the Southern District of Manhattan noted that Mashinsky had engaged in a comprehensive scheme to defraud investors.
The 12-year prison sentence is not the sentence that federal prosecutors sought based on the established charges. According to federal prosecutors, Mashinsky deserves a 20-year prison sentence as a fair punishment.
Notably, Mashinsky pleaded guilty to two counts of fraud, including commodities fraud and securities fraud. Under the plea agreement, Mashinsky agreed to pay a fine of $48 million and will not appeal any sentence up to 30 years.
However, this amount is just a drop in the bucket as Celsius has identified financial losses exceeding $1 billion. Nonetheless, the court has approved a restructuring plan for Celsius into a creditor-owned Bitcoin mining company called Ionic Digital LLC.
What Comes Next for the Cryptocurrency Market After Mashinsky's Conviction
Since the cryptocurrency industry experienced a bear market in 2022, driven by the collapse of Terra Luna and FTX, lawmakers in various jurisdictions have implemented measures to protect web3 investors. In the United States, Sam Bankman Fried has become an important lesson for web3 developers looking to overturn established cryptocurrency regulatory rules.
Therefore, the cryptocurrency market is well-positioned for exponential growth in the coming years, driven by clear legal frameworks. Furthermore, institutional investors have forced global lawmakers to pay attention to digital assets as a tested alternative investment.