Mashinsky Slams DOJ 20-Year Sentence Bid as a “Death-in-Prison” Verdict

Alex Mashinsky, the embattled founder and former CEO of defunct crypto lender Celsius, has fired back at prosecutors seeking to lock him away for two decades, calling the proposed sentence a “venom-laced” overreach that amounts to a life sentence in disguise.

In a sharply worded court filing on May 5, Mashinsky’s legal team argued that a 20-year sentence would be excessively harsh for a 59-year-old nonviolent, first-time offender who has accepted responsibility and pled guilty. 

“This is not a man who preyed on victims with malicious intent,” the defense wrote, pushing for a sentence of no more than 366 days. “The government’s recommendation effectively says he deserves to die in prison.”

On the other hand, prosecutors have accused Mashinsky of orchestrating a calculated and deliberate scheme to deceive Celsius users, manipulate the price of the platform’s native token CEL, and quietly profit to the tune of $48 million before Celsius imploded in June 2022.

DOJ Pushes Narrative of Deceit and Betrayal

Federal prosecutors claim Mashinsky’s crimes were not momentary lapses in judgment but “deliberate, calculated decisions to lie, deceive, and steal.” They bolstered their case by submitting victim statements from hundreds of investors who trusted their life savings to Celsius. 

Many cited Mashinsky’s public assurances of safety and security as a key reason they kept funds on the platform.

The DOJ has maintained that his guilty plea in December 2024 to commodities fraud and market manipulation further validates their stance. Yet his attorneys insist he is being unfairly cast as the sole villain in a collapse that stemmed from broader market failures and group decisions within the company.

“He is now the scapegoat for every Celsius decision, every vote, and even market fluctuations,” they argued.

Sentencing Looms Amid Industry Reckoning

Celsius filed for Chapter 11 bankruptcy on July 13, 2022, with $4.7 billion in liabilities. After over a year of court proceedings, $2.53 billion was repaid to 251,000 creditors in August 2024.

Mashinsky’s sentencing is scheduled for May 8 in a New York federal court. The outcome will not only determine his fate but could also set a precedent as U.S. authorities intensify their crackdown on crypto-related fraud. 

Meanwhile, former Celsius revenue chief Roni Cohen-Pavon—who pleaded guilty in 2023—is awaiting his postponed sentencing later this year.