Here’s Alex Mashinsky’s maximum prison sentence after pleading guilty to fraud charges

Alex Mashinsky, the former CEO of cryptocurrency lender Celsius, has pleaded guilty to one count of commodity fraud and one count of securities fraud.

Taken together, these charges carry a maximum sentence of 30 years in prison.

Mashinsky’s guilty plea

Mashinsky was initially indicted in July 2023 on seven counts, including fraud, conspiracy and market manipulation related to the Celsius token, CEL.

During a hearing Tuesday before U.S. District Judge John Koeltl, he admitted to making false claims about Celsius’ “Earn” program. The scheme tricked investors into transferring their Bitcoin to the platform, earning them an estimated $48 million in profits.

“I said Celsius had the approval of the regulators,” Mashinsky said, according to an Inner City Press report. “It was fake. I falsely said that I was not selling my CEL tokens. I accept full responsibility for my actions.”

According to court documents, the former executive has agreed to forfeit the proceeds of his illegal schemes. He is scheduled to be sentenced by Judge Koeltl on April 8, 2025.

Federal prosecutors have accused the 59-year-old of luring retail investors to Celsius by promising high returns while secretly manipulating the market to inflate the price of the company’s native CEL token.

US attorney Damian Williams described his actions as “one of the biggest frauds in the crypto industry”, highlighting how he used catchy slogans like “Get out of the bank yourself” to attract billions in investments.

Fraudulent practices behind the collapse of Celsius

Celsius, a crypto lending platform, offered services such as earning rewards on crypto deposits, taking loans secured by cryptocurrencies, and asset custody. The main offering was the “Win” program, which promised high returns by investing users’ crypto. Under Mashinsky, the company misrepresented the safety, profitability and sustainability of its offerings to attract retail customers.

The 59-year-old and other executives manipulated the market to inflate the value of CEL. Court documents show he and former chief revenue officer Roni Cohen-Pavon spent millions of dollars using customer deposits to artificially prop up CEL’s price, misleading investors about its true value.

Mashinsky personally profited by selling $48 million of CEL at inflated prices while falsely claiming he was not selling. Before the platform halted withdrawals on June 12, 2022, it had withdrawn $8 million worth of crypto assets. The hiatus left customers unable to access $4.7 billion in crypto, and on July 13, 2022, the company filed for Chapter 11 bankruptcy.

The former CEO’s guilty plea follows that of Roni Cohen-Pavon, who also pleaded guilty in September 2023. Cohen-Pavon admitted to four charges, including involvement in CEL price inflation. He agreed to cooperate with officials in their investigations and is scheduled for sentencing on December 11.

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