Alex Mashinsky, once hailed as a pioneer in the crypto lending world, is about to spend the next 20 years behind bars because of what prosecutors call a “deliberate and calculated” scam in crypto history. With nearly $7 billion in customer losses, Mashinsky’s fate is about to be decided on May 8th.
Mashinsky was the founder and CEO of Celsius Network, a crypto platform that once held over $20 billion in assets and promised investors high returns with little risk. But behind the scenes, things were very different.
On Monday, 28th April, the U.S. Department of Justice filed a formal sentencing memo, asking the court to give Mashinsky 20 years in prison. Prosecutors say his actions caused nearly $7 billion in losses in customer money when Celsius collapsed in 2022.
According to the DOJ, Mashinsky lied to users about the safety of their funds. He made risky trades, handed out unsecured loans, and secretly used customer money to push up the price of Celsius’s own token (CEL).
While publicly claiming he was holding onto CEL like other users, he quietly sold $48 million worth for himself.
Mashinsky’s lawyers have tried to blame the market crash and government regulators for Celsius’s downfall. But the Department of Justice (DOJ) says this wasn’t just bad luck, it was a well-planned scam.
The DOJ called him the “architect of a massive fraud” who still refuses to take full responsibility for what happened.
But this case isn’t only about money. More than 200 victims submitted emotional statements explaining how they lost everything when Celsius collapsed. Their stories were added to the DOJ’s filing, as prosecutors pushed for a tough sentence for Mashinsky.
Judge John G. Koeltl will deliver the final verdict on May 8 — a decision that could become one of the most defining moments in crypto legal history.
Prosecutors warned that a lighter sentence would undermine trust in the justice system and encourage other crypto leaders to chase profit at any cost. They insist Mashinsky has yet to take full responsibility, instead blaming regulators, the market, and even his customers.
This case is now a turning point in how crypto crime is treated in court.
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