NEW YORK, NY — Alex Mashinsky, the founder and former CEO of bankrupt crypto lending platform Celsius Community, was sentenced to 12 years in jail on Thursday for fraud.
Choose John Koeltl of the Southern District of New York (SDNY) handed down the sentence, saying the 12 years — composed of a 120-month sentence to be served concurrently with a separate 144-month sentence for the 2 expenses Mashinsky pled responsible to — break up the distinction between the protection and prosecution’s sentencing memos.
Earlier than Celsius’ collapse in 2022, Mashinsky repeatedly lied to buyers concerning the security of their deposits. He falsely claimed that Celsius had regulatory approval, he insisted that the platform didn’t make uncollateralized loans when, actually, it did, and he lied about promoting his CEL tokens whereas manipulating the value for his personal monetary acquire. Mashinsky’s poor management and self-dealing drove Celsius into chapter 11, leaving a gaping $1.2 billion gap — which prosecutors stated is extra like $7 billion at in the present day’s costs — within the firm’s steadiness sheet.
Mashinsky was arrested in July 2023 on a seven-count indictment, however ultimately reached a plea take care of prosecutors that noticed him plead responsible to 1 rely every of securities and commodities fraud final December. As a part of his plea deal, prosecutors agreed to a most sentence of 30 years in jail, however prompt a 20-year sentence of their sentencing memorandum filed with the courtroom final month.
“Mashinsky’s crimes were not the product of negligence, naivete, or bad luck,” prosecutors wrote. “They were the result of deliberate, calculated decisions to lie, deceive and steal in pursuit of personal fortune.”
