Celsius Founder Could Face Life in Prison as Victims Demand Justice

Alex Mashinsky, founder of Celsius Network, will be sentenced on May 8. Over 200 victims have written to U.S. District Judge John G. Koeltl for the harshest punishment possible. Most are demanding that Mashinsky spend the rest of his life in prison.

Mashinsky admitted to lying to customers about the company’s financial status and using their money to increase the price of Celsius’s token, CEL. Victims say his actions caused severe economic and emotional harm.

Investors Share Stories of Pain

Amongst the victims, one investor, Brandon Lawrence, said he lost 1.5 Bitcoin (BTC) worth about $141,000 at today’s market price. He wrote that Mashinsky destroyed many lives, and some victims even took their own lives because of their losses. 

Lawrence said Mashinsky should be punished like Bernie Madoff and spend life in prison. For context, Bernie Madoff was a well-respected American financier who ran the biggest Ponzi scheme in history. 

Another investor, Bryan Barrett, said he trusted Celsius with his savings and feels betrayed. He asked the judge to show that people who break the law and hurt others will be held responsible.

Celsius Network Collapses During Crypto Winter

Celsius, a well-known crypto lending platform, was one of the first big companies to collapse during the “crypto winter” of 2022. In June 2022, Celsius froze customer withdrawals, locking away $4.7 billion in customer funds. Weeks later, the company filed for bankruptcy, and Mashinsky resigned as the company’s CEO in the same year. 

Other companies, such as Voyager Digital, BlockFi, FTX, and Three Arrows Capital, also collapsed around the same time. However, Mashinsky’s actions stood out because prosecutors said he falsely used customer money to boost CEL’s price.

Internal messages between executives revealed the truth, as they knew the price value was fake. According to a message from Chief Revenue Officer Roni Cohen-Pavon, the company appeared to be the only active buyer.

Mashinsky’s Criminal Charges

Mashinsky was first charged in July 2023 with seven crimes, including wire fraud and market manipulation. He later pleaded guilty to two felony counts.

Despite facing up to 30 years in prison, Mashinsky has asked the court for a lighter sentence. His lawyers said they need more time to explain his actions and requested a delay. The court agreed to move sentencing from April 8 to May 8.

Mashinsky has also hired two famous attorneys, Marc Mukasey and Torrey Young. These same lawyers have represented FTX’s Sam Bankman-Fried and the Trump Organization.

As May 8 approaches, the pressure builds. Many victims want the judge to show no leniency as they believe that Mashinsky deserves the maximum sentence.