Alex Mashinsky, founder and former CEO of Collapsed Crypto Lender Celsius Network, faces the prospect of spending the next 20 years behind the bar if the US Department of Justice ruling memo request is granted.
In a memo filed late Monday, the DOJ urged the court to impose 20 years in prison, calling the crime a “intentionally calculated” fraud, causing nearly $7 billion in client losses, causing thousands of people to be economically devastated.
Maski, who misrepresented the safety of his client deposits in December and pleaded guilty to manipulating a Celsius cell token, continues to turn his crimes into liability, market conditions and even victims.
“The crime of machine skiing was not a product of negligence, naiveness or bad luck,” they wrote. “These were the result of intentional and calculated decisions to lie, deceive and steal personal property.”
At its peak in 2021, celsius managed over $2 billion in customer crypto assets. Machine Ski actively sold the platform as a safe alternative to banks, promising high yields and low risk.
Prosecutors said these promises were fake. Celsius took out a non-consignment loan, made dangerous transactions, and secretly used customer assets to manipulate the price of cell tokens.
Prosecutors said Machineski personally sold more than $48 million cells at an inflated price. When Celsius collapsed into bankruptcy in July 2022, approximately $4.7 billion in customer funds were locked in.
After bankruptcy, clients remained shortfalls of over $1 billion. Adjusting today’s crypto prices since the 2024 “Trump Trade” rally, prosecutors estimate that the total loss is close to $7 billion.
Prosecutors warned that sub-important prison sentences would reflect the gravity of machine skiing’s actions, undermine respect for the law, and fail to send the wrong message to other crypto executives who were tempted to pursue personal abundance at the expense of their clients.
Judge John G. Koeltl will declare Mashinsky on May 8th.
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