Victims of failed crypto lender Celsius push for life sentence for its CEO

Hundreds of investors asked a federal judge to impose a life sentence on Celsius CEO Alex Mashinsky for his role in the crypto lender’s 2022 collapse.

Celsius Network investors are calling for a life sentence for co-founder and former chief executive Alex Mashinsky, who pleaded guilty to fraud charges after the crypto lender collapsed in 2022.

In a court filing this week, prosecutors submitted more than 200 victim impact statements ahead of Mashinsky’s May 8 sentencing, Bloomberg has learned, adding that most urged the court to impose the harshest sentence allowed by law.

“The very essence of cryptocurrency, along with my ambitions and dreams, has been tarnished. I’m saddled with a mountain of debt and disgrace. The prospects I once envisioned are now unattainable, all due to Alex Mashinsky and his ill-timed bankruptcy filing.”

Brandon Lawrence, a Celsius investor who says he lost about 1.5 BTC

Still, some victims asked for a more lenient sentence. For instance, retired teacher Stephen Levenberg, who lost nearly $400,000 after putting his retirement savings into Celsius, said he would accept a three-year sentence if Mashinsky returned the stolen funds.

Mashinsky’s lawyers are asking for a sentence of no more than one year. Probation officers have recommended 15 years, while prosecutors haven’t yet made a final recommendation.

Celsius froze the withdrawal of client assets in June 2022. A month later, the company went bankrupt. The crypto lender said it had only $167 million left in its accounts to repat its hands and froze all customer withdrawals to give time to seek more funds.

According to reports, Mashinsky and his wife withdrew an estimated $12 million in crypto from the Celsius Network before the bankruptcy proceedings began. Celsius, launched in 2018, grew to 200 employees and managed around $10 billion in crypto assets by 2021.