Former Celsius CEO Pleads Guilty to Fraud With 30-Year Prison Sentence

Key Points:

• Former Celsius CEO Alex Mashinsky pleaded guilty to commodities fraud and manipulating the CEL token, facing up to 30 years in prison.
• The crypto lender filed for bankruptcy in 2022 after a market crash led to mass withdrawals.

Alex Mashinsky, the CEO and co-founder of Celsius Network, has pleaded guilty to two counts of fraud, marking another high-profile case in the fallout from the 2022 cryptocurrency market crash.

Read more: Alex Mashinsky Pleaded Not To Fraud, Freed For $40 Million

Former Celsius CEO Pleads Guilty to Fraud Charges

The charges include commodities fraud and a scheme to manipulate the price of CEL, an in-house token of Celsius. The former Celsius CEO admitted to the manipulation by artificially inflating CEL value, reaping personal profits of $42 million.

Mashinsky also admitted to deceiving customers into believing that regulatory approval was granted for the “Earn” program at Celsius, offering investment returns on cryptocurrency deposits. Actually, no such approval existed. In addition, he concealed his sale of CEL holdings while promoting the token.

Federal prosecutors in Manhattan, who initially charged Mashinsky with seven counts, agreed to a plea deal under which he faces up to 30 years in prison.

U.S. District Judge John Koeltl will sentence the former Celsius CEO on April 8, 2025. The plea is the second in the case, following one from Roni Cohen-Pavon, Celsius’s former chief revenue officer, who pleaded guilty in 2023 and is cooperating with the investigation.

Increasing Crackdown on Cryptocurrency Fraud

Celsius, an up-and-coming crypto lender founded in 2017, had promised depositors high returns while lending digital assets to institutional investors. After the sharp decline in cryptocurrency values spurred a wave of customer withdrawals that ultimately froze many out of their funds, it filed for bankruptcy in July 2022. Celsius emerged from bankruptcy at the beginning of 2023 and transitioned its focus to Bitcoin mining.

The case represents one among recent hair-raising crackdowns owing to a serious market collapse that took place in 2022. It was the year that other notable casualties, such as FTX and Three Arrows Capital, were filed for bankruptcy. In 2024, FTX founder Sam Bankman-Fried was convicted of fraud and sentenced to 25 years imprisonment.