New York, New – Alex Mashinsky, founder and former CEO of Bankruptcy Crypto Lending Platform Celsius Network, was sentenced to 12 years in prison for fraud on Thursday.
Judge John Koeltl of the southern district of New York (SDNY) handed down the verdict and said the 12-year-in-law of a 120-month judgment to be seen simultaneously with a separate 144-month judgment for the two charges that Mashinsky pleaded guilty to-reflected Mashinsky’s “extremely serious” crimes. The verdict divides the difference between the mere year and a day in prison requested by his defense team, and the 20 years that prosecutors hinted. He has also agreed to lose $ 48 million and more pieces of real estate.
“No matter what judgment, the judgment will not cure the monetary or psychological injury caused by the victims,” Koeltl said.
Before Celsius’ collapse in 2022, Mashinsky was repeatedly lied to investors about the security of their deposits. He falsely claimed that Celsius had legislative approval, he insisted that the platform did not make uncollateralized loans when it actually did, and he lied about selling his Cel -Tokens, manipulating the award for his own financial gain – making over $ 48 million in Cel’s profit. Mashinsky’s poor leadership and self-trafficking drove Celsius in bankruptcy, leaving a meager hole of $ 1.2 billion-like prosecutors said is more like $ 7 billion for today’s awards-in the company’s balance.
When Celsius collapsed, over 100,000 creditors claimed they lost a collective $ 4.7 billion according to the first bankruptcy documents.
“Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank as he actually used these assets to place risky bets and to make his own pockets,” US lawyer Jay Clayton said in a statement. “In the end, Mashinsky made tens of thousands of millions of dollars while his customers lost billions. America’s investors deserve better. The case of tokenization and the use of digital assets is strong, but it is not a license to deceive. The rules against fraud still apply, and SDNY will keep those who flew those who flew them to their crimes.”
In both their prior judging documents and in their testimonies in court on Thursday, Mashinsky and his lawyers tried to neglect the role of the one -time CEO in fraud. His lawyers told the court that Mashinsky “does not have a malicious bone in his body” and that the government’s attempt to characterize him as the architect of a fraud arrangement was “a hoax.”
Mashinsky cried when his lawyer, Marc Mukasey, told the court about his personal qualities-inclusive his military service in the Israeli army, his alleged track record to hire homeless people to work with his various businesses and confusing his ongoing work with a non-fiction book on gravity since his arrest he prevented the judge to consider a form of mashing. When Mashinsky himself talked to the judge, he cried at intervals when he apologized for the injury caused by his victims.
“As a person who came from nothing, I acknowledge how hard people work to earn, save and invest in crypto,” said Mashinsky. “I respectfully ask the victims for forgiveness and I apologize for them all for my mistakes. I’m really sorry.”
Six of these victims spoke in court Thursday and detailed their pain and suffering in the wake of Celsius’ collapse.
A victim, Cameron herds, told the court that Mashinsky and his lawyer’s spin on his behavior were a “terrible minimization” of the injury he caused to Celsius.
“Defense says he is working on a new book on gravity, but he does not seem to understand the seriousness of the situation,” the crews said, adding that at least 231 Celsius creditors have died since the collapse of the platform and will never be done whole.
Another creditor, Hollis Waite, described how he was “unfortunately unprepared” to send his two young children to college after losing a significant part of his savings in Celsius. Yet another, Hugh Mitton, told the court that he had lost sleep, his mental health and his time since Celsius’ collapse. Mitton questioned Mashinsky’s attorney’s characterization that he voluntarily lacked his son’s university exam, also Thursday to participate in his criminal sentence and take responsibility for his crimes.
“[He] Don’t mention all the people who can no longer afford to send their children to the university, ”Mitton said.
Both victims and prosecutors pointed to Mashinsky’s continued non-compliance with real accountability for the actions that led to Celsius’ downfall, as well as the financial gain he and his wife Krissy made by Celsius, even during its collapse and subsequently Bankruptcy Hvor Krissy sold T-shirts who said “unbankrut yourself”, a spin on Celsius “” unbank “.”
Mashinsky was stone -facing when he listened to his victims’ testimonies. When the judge passed the verdict, he really seemed surprised and said:
“I feel that even though I am here to take responsibility, I take responsibility for a thousand employees. Not one of them has come to say what they have done. That’s what your honor.”
As part of his plea for agreement, Mashinsky is unable to appeal his verdict. He was ordered for self -report in prison for starting his sentence in September. His lawyers requested that he be allowed to serve his sentence in FCI Otisville, a prison in Middle Safety in New York, which is also a temporary home to Mango Markets Exploiter Avi Eisenberg, who was recently sentenced to four years in prison for the possession of child pornography.
If he is serving all his judgment, Mashinsky will be 72 years old by release.
