Prominent gold advocate and financial commentator Peter Schiff has likened beleaguered Celsius Network founder Alex Mashinsky to infamous Ponzi schemer Bernie Madoff. A federal court issued Mashinsky a 12-year prison sentence for defrauding investors through the beleaguered crypto lending platform.
Bitcoin critic Schiff shared a message on social media platform X late Thursday after the former Celsius founder was sentenced, claiming he “knew Mashinsky was a fraud the moment he met him during a Kitco debate.”
“His fraud was so obvious that I compared him to Bernie Madoff. The government didn’t act until after his Ponzi scheme collapsed,” Schiff argued, sharing a resurfaced video from a 2021 debate where he contended Mashinsky’s claims about Bitcoin yields.
Peter Schiff: Bitcoin has no yield
The video Schiff shared shows a heated exchange between the two men during a live-streamed debate hosted by Kitco News. In the footage, Mashinsky claimed that Bitcoin pays dividends through Celsius Network with a 6.2% yield. Schiff asked the founder how such returns were possible without risks.
Celsius Founder Alex Mashinsky was just sentenced to 12 years in prison. I knew this guy was a fraud the moment I met him during a Kitco debate. His fraud was so obvious that I compared him to Bernie Madoff. The government didn't act until after his Ponzi scheme collapsed. pic.twitter.com/FQLBxwXMDE
— Peter Schiff (@PeterSchiff) May 8, 2025
“How do you earn yield on Bitcoin?” Schiff pressed. “You’ve got to be taking a tremendous amount of risk. The Bitcoin itself doesn’t generate any yield.”
Mashinsky told the gold advocate that Celsius enabled customers to “unbank themselves,” and that the yield was derived from lending out Bitcoin. “It’s an amazing opportunity for people to unbank themselves, right? Take advantage of this market,” he continued.
Schiff was visibly unconvinced, warning viewers at the time, “You know who also had an amazing opportunity? Bernie Madoff had an amazing opportunity too.”
Schiff compares Mashinsky to ponzi-scheme perpetrator Bernie Madoff
According to the US Department of Justice public records, Bernard “Bernie” Madoff, who passed away in prison in 2021, ran the largest Ponzi scheme in US history. Once a former NASDAQ chairman, Madoff defrauded thousands of investors out of approximately $65 billion.
Madoff was arrested in December 2008 during the global recession, when he was unable to cover $7 billion in requested withdrawals. He later pleaded guilty to 11 federal felonies and received a 150-year prison sentence. He died in 2021 at the age of 82.
The US DOJ confirmed in late December 2024 that the Madoff Victim Fund had disbursed its tenth and final round of payments, totaling more than $131 million. In all, nearly $4.3 billion was distributed to about 41,000 victims in 127 countries, compensating nearly 94% of their verified losses.
“This final round of payouts represented the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions,” the Department stated.
Most victims of Bernie Madoff’s Ponzi scheme were not wealthy institutions or elite investors. According to the Madoff Victim Fund (MVF), the majority were everyday individuals, with average losses hovering around $250,000 per account.
Mashinsky sentenced to 12 years
As reported by Cryptopolitan on May 8, US District Judge John Koeltl handed Mashinsky a 12-year prison term. The 59-year-old was found guilty of securities fraud and commodities fraud after misleading investors about the safety and stability of the now-defunct Celsius.
The judge also said he inflated the value of Celsius’ proprietary CEL token while allegedly enriching himself with more than $48 million in personal gains.
Federal prosecutors had pushed for at least a 20-year sentence, asserting that Mashinsky’s deception caused billions of dollars in losses and impacted thousands of investors.
Mashinsky had asked the court for a sentence of just over a year because he was supposedly “remorseful” and promised to make amends to his family and former clients.
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