Hopes for Leniency Dashed

Mashinsky’s defense argued for a lighter sentence — 366 days — citing his clean record, military service, and guilty plea. However, federal prosecutors pushed for a 20-year term, stating that Mashinsky targeted retail investors, not institutions. This fact ultimately led the court to impose a harsher penalty.

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Trump’s Pardon Legacy Fails to Influence Outcome

Former President Donald Trump previously pardoned high-profile crypto figures like Ross Ulbricht and BitMEX executives, raising hopes in some circles for clemency. Yet this case proved different. Despite arguments comparing him favorably to Sam Bankman-Fried, the court delivered a severe verdict.

With figures like Changpeng Zhao seeking clemency and others like Roger Ver and SBF under legal scrutiny, this ruling sets a precedent that crypto fraud, regardless of innovation or intent, will not be tolerated.

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According to a 97-page court filing dated April 28, Mashinsky deliberately misled thousands of Celsius users, which resulted in massive financial losses. The filing noted that customers lost access to nearly $4.7 billion worth of crypto assets when Celsius froze withdrawals on June 12, 2022.

“Alexander Mashinsky led a multi-year campaign of deceit, self-enrichment, and exploitation that devastated thousands and caused billions in losses. A 20-year prison sentence is a fitting consequence for his actions,” prosecutors stated.

$48 Million in Personal Profits

In a plea deal finalized in December 2024, Mashinsky admitted to being the mastermind behind the scheme and acknowledged that he personally made over $48 million while the total losses topped $550 million.

The DOJ emphasized that his fraudulent behavior was “not a matter of bad luck or naivety,” but instead involved intentional deception and theft to pursue personal wealth.

Sentencing Hearing Set for May 8

The sentencing hearing is scheduled for May 8 and will be overseen by U.S. District Judge John Koeltl in the Southern District of New York. According to prosecutors, more than 200 victims have submitted statements detailing their experiences and losses.

Other Celsius Co-Founders Also Named

While Mashinsky is seen as the central figure in the case, other Celsius co-founders were also implicated. Shlomi Daniel Leon, who co-founded Celsius in 2017, stepped down from his role in October 2022, just months after the company’s collapse.

In July 2023, both Leon and another co-founder, Hanoch Goldstein, were charged by the Federal Trade Commission, which also issued a $4.7 billion penalty against the now-bankrupt firm

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Bankman-Fried is expected to be ready for his sentencing hearing on March 28. After resigning as FTX CEO, he filed for bankruptcy and was convicted of fraud. Prosecutors recommend not continuing to the second hearing. His time to present his sentence proposals was extended until February 27.

According to a report by Inner City Press, Bankman-Fried reached an agreement on conflict-free legal representation with his lawyers Mukasey and Young. During this process, former Celsius CEO Alex Mashinsky also took a similar step. The hearing in the Southern District of New York was Bankman-Fried’s first appearance outside of prison. Although the media typically does not pay much attention to this situation, pictures of the former CEO with prisoners made it into the press.

While Mukasey and Young continue to represent Bankman-Fried and Mashinsky, lawyers like Christian Everdell and Mark Cohen withdrew. Bankman-Fried is scheduled to appear before Judge Lewis Kaplan for sentencing.

Former FTX CEO Bankman-Fried, known in the crypto sector as the “Golden Boy”, faced legal issues after the company went bankrupt. After the hearing in 2023, five more serious charges are expected, but prosecutors decided not to hold a second hearing in the public interest. Bankman-Fried’s defense team is expected to present their sentence proposals.

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