News Summary

Alex Mashinsky, the founder of the defunct cryptocurrency lending platform Celsius Network, has been sentenced to 12 years in prison by a US federal judge in the Southern District of New York. Mashinsky was charged with commodities fraud and securities fraud after misleading Celsius customers about the safety and nature of their investments, portraying the company as a modern-day bank while operating it as a risky investment fund. The charges stem from Mashinsky’s manipulation of a proprietary crypto coin and false claims about how customer funds would be used, which resulted in financial losses for many of Celsius’s clients. Founded in 2017, Celsius promised high interest rates on crypto deposits, amassing over $25 billion in customer assets by 2021. However, the company filed for bankruptcy in July 2022, leaving customers unable to withdraw over $4.7 billion. As part of his plea deal, Mashinsky has agreed to forfeit $48 million.