Criminal Justice Division Pursues Two Decades of Imprisonment for Celsius Network's Creator, Alex Mashinsky
The United States Department of Justice (DOJ) has charged Alex Mashinsky, the former CEO of the collapsed crypto platform Celsius, in connection with a massive fraud scheme. The DOJ is demanding a 20-year prison sentence for Mashinsky.
Mashinsky personally benefited from the fraudulent schemes, acknowledging his involvement in a December 2024 guilty plea. The DOJ's argument for a lengthy prison sentence is based on several factors, including Mashinsky's deliberate criminal actions, lack of remorse, and the gravity of the crimes.
The fraud scheme resulted in Celsius users losing access to approximately $4.7 billion in crypto assets. Celsius engaged in high-risk lending practices, made speculative investments, and used customer funds to artificially inflate the value of its native token, CEL. Mashinsky used customer funds to manipulate the price of CEL, giving the false impression of genuine demand for CEL and enriching himself by selling his private stash of CEL tokens at artificial prices.
These actions resulted in $550 million in losses for investors and $48 million in personal profits for Mashinsky. The DOJ contends that a lengthy prison sentence is essential to reflect the gravity of Mashinsky's crimes, deter others from committing similar crimes, uphold respect for the law, and ensure that the punishment fits the crime.
Celsius declared bankruptcy in 2022 and could not return customers the funds they had deposited. The safe and secure Celsius that Mashinsky had described did not exist, as he had misrepresented how Celsius handled customer deposits and fabricated the company's profitability.
The DOJ's recommendation for a 20-year prison sentence for Mashinsky is intended to serve as a deterrent to others seeking personal gain through fraudulent means. Mashinsky's guilty plea in December 2024 marks a significant step towards holding him accountable for his actions and ensuring justice for the victims of the Celsius fraud scheme.
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