Crypto bank "cruelty"
Celsius founder Alex Mashinsky sentenced to 12 years for “unbank yourself” scam
Some victims lost everything to the Celsius Network's fraud.
Ashley Belanger
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May 9, 2025 10:50 am
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Alex Mashinsky, former chief executive officer of Celsius Network Ltd., pled guilty to orchestrating a yearslong scheme to mislead customers about the financial health of his failing crypto lender and manipulate cryptocurrency prices for his own profits.
Credit:
Bloomberg / Contributor | Bloomberg
Alex Mashinsky, former chief executive officer of Celsius Network Ltd., pled guilty to orchestrating a yearslong scheme to mislead customers about the financial health of his failing crypto lender and manipulate cryptocurrency prices for his own profits.
Credit:
Bloomberg / Contributor | Bloomberg
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Alex Mashinsky—the disgraced founder of the Celsius Network cryptocurrency bank who deceived hundreds of thousands into losing billions with the catchy slogan "unbank yourself"—was sentenced to 12 years in prison on Thursday.
Back in December, Mashinsky pleaded guilty to securities fraud and commodities fraud. Federal prosecutors slammed him for reaping $48 million in profits while causing billions in investor losses by artificially inflating the value of his network's token, Cel. The Department of Justice and dozens of victims urged the court to order a maximum sentence of 20 years, while Mashinsky hoped the court would agree that he had shown remorse and should only serve one year and one day, Reuters reported.
Mashinsky's downfall started in 2022, when the Celsius Network suddenly stopped allowing withdrawals, claiming that "extreme market conditions" were to blame, a shady move that caused some customers to question the crypto bank's financial health. One month later, the bank filed for bankruptcy, exposing a $1.19 billion deficit in its balance sheets and still holding onto customers' funds while scoffing at supposed "misinformation" that their money would be lost.
In 2023, the Federal Trade Commission reached a $4.7 billion settlement permanently banning Celsius from handling assets after finding that it squandered billions in user deposits with an "old-fashioned swindle" that tricked "consumers into transferring cryptocurrency onto the platform by falsely promising that deposits would be safe and always available."
As the case dragged on, Mashinsky and his family appeared unremorseful, victims said, even while facing threats of violence and significant public shaming. Some victims accused Mashinsky of lying to their faces and pushing them to continue depositing funds even when the end was near and he knew that the money would be lost.
In victim statements sent to US District Judge John Koeltl, customers accused Mashinsky of weaponizing his family-man brand to scam many naïve investors out of their life savings. Some suicides were reported, victims said, and elderly victims were among the most vulnerable, with many becoming homeless after retirement funds were drained. Among the victims was Rien Vanmarcke, who confessed to feeling haunted by guilt after convincing his aging mother to invest in Celsius and losing the majority of their savings.
And "Mashinsky's cruelty didn't end with the collapse," Vanmarcke wrote. "His family mocked victims with 'unbankrupt yourself' merchandise funded by stolen savings, while flaunting luxury lifestyles online."
Other victims also described feeling palpable shame, even if they felt their road to recovery wasn't as bad as others. One victim, Daniel Frishberg, was still in high school when he lost 70 percent of his crypto to Mashinsky's false promises.
"I am lucky that I am young and have plenty of time to make back the money I lost due to naively trusting Mr. Mashinsky—many are not as fortunate," Frishberg wrote.
Ashley Belanger
Senior Policy Reporter
Ashley Belanger
Senior Policy Reporter
Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.
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