Alex Mashinsky, the founder and former CEO of the now-defunct cryptocurrency lending platform Celsius, faces a 20-year jail sentence because the US Division of Justice (DOJ) seeks a extreme penalty for his function in a multibillion-dollar fraud.
The DOJ on April 28 filed the federal government’s sentencing memorandum towards Mashinsky, recommending a 20-year jail sentence for his fraudulent actions, which led to billions of {dollars} in losses for Celsius clients.
The 97-page memo talked about that Celsius customers had been unable to entry roughly $4.7 billion in crypto property after the platform halted withdrawals on June 12, 2022.
“The Courtroom ought to sentence Alexander Mashinsky to twenty years’ imprisonment as simply punishment for his years-long marketing campaign of lies and self-dealing that left in its wake billions in losses and 1000’s of victimized clients,” the DOJ said.
Mashinsky’s private profit was $48 million
Along with the investor losses, the DOJ famous that Mashinsky has personally profited from the fraudulent schemes in his function.
As a part of his guilty plea in December 2024, Mashinsky admitted that he was the chief of the felony exercise at Celsius, that his crimes resulted in losses in extra of $550 million, and that he personally benefited greater than $48 million, the DOJ mentioned.
The DOJ highlighted that Mashinsky’s responsible plea confirmed that his crimes had been “not the product of negligence, naivete, or unhealthy luck,” however somewhat the results of “deliberate, calculated choices to lie, deceive, and steal in pursuit of private fortune.”
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The memorandum got here days earlier than Mashinsky’s sentencing listening to, which is scheduled for Might 8, and can be presided over by US District Decide John Koeltl within the Southern District of New York.
Beforehand, former SEC Chair Jay Clayton, who was sworn in as interim US Attorney for Manhattan final week, shared in an April 23 letter that no less than 200 victims filed statements in the case towards Mashinsky.
Different Celsius co-founders
Whereas Mashinsky emerged as a key determine within the Celsius fraud, others had been concerned within the large cryptocurrency rip-off, together with Shlomi Daniel Leon, who co-founded Celsius with Mashinsky in 2017.
Previously the chief technique officer (CSO) of Celsius, Leon quit his job in October 2022, months after Celsius’ collapse in June.
In July 2023, the Federal Trade Commission charged Leon, together with Mashinsky and one other co-founder, Hanoch Goldstein, and issued a $4.7 billion positive towards the bankrupt lender.
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