Alex Mashinsky, the founder and former CEO of defunct crypto lender Celsius, has been sentenced to 12 years in prison after pleading guilty to fraud linked to the company’s dramatic collapse.

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The sentencing, announced by the US Department of Justice on Thursday, follows Mashinsky’s December admission to one count of securities fraud and one count of commodities fraud. Prosecutors said his actions contributed to billions in losses, primarily borne by retail investors.

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At its peak, Celsius claimed to manage over $25 billion in assets. But in mid-2022, during a broader downturn in the cryptocurrency market, the platform froze customer withdrawals and filed for bankruptcy just weeks later, leaving billions in user deposits inaccessible.

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Mashinsky was accused of misrepresenting the platform’s financial stability and business model, while also manipulating the price of its native CEL token by funnelling “hundreds of millions” into market purchases.

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“Alexander Mashinsky targeted retail investors with promises that he would keep their digital assets safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets,” said US Attorney Jay Clayton. “In the end, Mashinsky made tens of millions of dollars while his customers lost billions.”

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The sentencing comes as the Trump administration signals a softer stance on crypto regulation. A recent memo revealed the disbanding of a DOJ unit focused on crypto investigations, while the Securities and Exchange Commission has dropped several high-profile enforcement actions against companies including Coinbase and Robinhood.

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Mashinsky’s case, however, has remained a major symbol of the excesses of the 2021–22 crypto bull run, in which platforms promised stability and returns that later proved unsustainable.

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Celsius is now in liquidation, and customers continue to await clarity on asset recovery efforts.

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