Alex Mashinsky, the founder and former CEO of the now-defunct crypto lending platform Celsius Network, has been sentenced to 12 years in prison for fraud in New York City. Judge John Koeltl of the Southern District of New York (SDNY) issued the sentence, stating that Mashinsky’s actions were “extremely serious.” The 12-year sentence is composed of a 120-month term to be served concurrently with a separate 144-month sentence for the two charges Mashinsky pleaded guilty to. Mashinsky has also agreed to forfeit $48 million and several real estate properties.

Prior to the collapse of Celsius in 2022, Mashinsky deceived investors about the safety of their funds, claiming regulatory approval that did not exist, making uncollateralized loans despite denial, and manipulating the price of CEL tokens for personal profit, resulting in over $48 million in gains. His leadership failures and self-serving actions led to Celsius’ bankruptcy, leaving a significant financial gap in the company’s balance sheet.

Following Celsius’ collapse, over 100,000 creditors reported a collective loss of $4.7 billion. U.S. Attorney Jay Clayton criticized Mashinsky for targeting retail investors with false promises and using their assets for personal benefit.

During the sentencing proceedings, Mashinsky and his legal team tried to downplay his role in the fraud scheme. They highlighted his military service, philanthropic endeavors, and personal characteristics as mitigating factors. Mashinsky expressed remorse to the victims and asked for forgiveness for his mistakes.

Multiple victims of the Celsius collapse shared their stories in court, detailing the impact of Mashinsky’s actions on their lives. They criticized his lack of accountability and profit-making during the company’s downfall.

Mashinsky, unable to appeal his sentence per the plea agreement, will begin serving his prison term in September. Despite his lawyers’ request, the location of his incarceration was not specified. If he serves the full sentence, Mashinsky will be released at 72 years old.