Michaela
The U.S. Department of Justice (DOJ) has pushed for a 20-year prison sentence for Alex Mashinsky, the ex-CEO of the collapsed crypto platform Celsius, over his involvement in a massive fraud scheme.
In an April 28 sentencing memorandum, the U.S. government recommended the 20-year prison sentence for Mashinsky, citing his fraudulent actions that resulted in Celsius users losing access to approximately $4.7 billion in crypto assets. The platform had halted withdrawals on June 12, 2022, as part of its collapse, and Mashinsky’s role in the scheme has been blamed for the financial hardship suffered by users.
In addition to the substantial losses suffered by investors, the DOJ noted that Mashinsky personally benefited from the fraudulent schemes. In his December 2024 guilty plea, the former CEO acknowledged his involvement, which resulted in $550 million in losses for investors and $48 million in personal profits.
“In 2022, Celsius declared bankruptcy and acknowledged that it could not return customers the funds they had deposited. The reasons why soon emerged: the safe and secure Celsius that Mashinsky had spent years describing did not exist. He had misrepresented how Celsius handled customer deposits, fabricated the company’s profitability, and placed his customers’ funds at the mercy of uncollateralized loans and undisclosed market bets even when he had told customers he would not do so,” the memo wrote.
Additionally, the DOJ uncovered that Celsius engaged in high-risk lending practices, made speculative investments, and used customer funds to artificially inflate the value of its CEL token.
“Mashinsky further compounded the risk to his customers by using their funds to manipulate the price of Celsius’s native token, CEL, giving onlookers the false impression of genuine demand for CEL and giving Mashinsky a mechanism to enrich himself by selling his private stash of CEL tokens at artificial prices,” the memorandum stated.
The DOJ argued that, due to Mashinsky’s deliberate criminal actions and his lack of remorse, a “severe sentence is warranted.”
The department further contended that a lengthy prison sentence is essential to reflect the gravity of Mashinsky’s crimes, uphold respect for the law, ensure appropriate punishment, and deter others from seeking personal gain through fraudulent means.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
