Alex Mashinsky blasts government's 20-year 'venom-laced' sentence request, declaring it a 'death-in-prison sentence'

Alex Mashinsky, the former CEO of bankrupt crypto lending platform Celsius, is set to be sentenced on May 9 for his role in misleading users and manipulating the price of Celsius (CEL).

While the government is seeking a 20-year sentence, Mashinsky's lawyers argued for no more than 366 days in a May 5 reply memorandum filed in a New York district court.

The Department of Justice (DOJ) said in its May 8 sentencing request that Mashinsky, 59, should receive at least 20 years in prison for his actions. This sentence would leave him 79 if he serves the whole term.

Lawyers acting for Mashinsky stated that the government has failed to take into account his status as a nonviolent first-time offender with a previously unblemished 30-year history in business.

“The government's venom-laced submission recasts this case as one involving a predator with an intent to target victims, harm them, and steal their money,” they said.

“It concludes by recommending that a first time, nonviolent offender who pled guilty and accepts responsibility receive a death-in-prison sentence.”

Mashinsky’s crimes and plea deal

Mashinsky pleaded guilty in December 2024 to two out of seven charges brought by the DOJ. The charges included commodities fraud and manipulating the price of CEL, which enabled Mashinsky to profit by $48 million when selling his holdings before Celsius collapsed in June 2022.

Prosecutors initially filed seven charges in July 2023, and Mashinsky was arrested in December 2023.

Lawyers acting for Mashinsky also claim the DOJ’s push for a 20-year sentence is because their client is unwilling to “capitulate to the government’s exaggerated characterizations of his actions,” specifically that he was a “fraud from the get-go.”

“Alex is inserted as the scapegoat for every corporate action, every group decision, every unanimous vote, every market fluctuation, and every employee's watercooler speculation,” they said.

As part of its April 28 sentencing request, the DOJ said Mashinsky’s guilty plea showed that his crimes were deliberate, calculated decisions to lie, deceive and steal.

Days earlier on April 23, US federal prosecutors also filed statements from hundreds of victims who lost money due to the Celsius collapse. They detailed how some had entrusted their life savings to the protocol, believing Mashinsky’s assurances that it was safe.

Related: What do crypto users want to happen to Alex Mashinsky?

After freezing withdrawals and deposits in June 2022, Celsius filed for Chapter 11 bankruptcy on July 13, 2022, owing $4.7 billion to creditors.

A US bankruptcy court approved Celsius' restructuring plan to repay customers in November 2023, and by August 2024, $2.53 billion had been paid to 251,000 creditors.

Former Celsius chief revenue officer Roni Cohen-Pavon also pleaded guilty in September 2023 to similar charges, but his Dec. 11 sentencing has been delayed until after Mashinsky is sentenced.