Alex Mashinsky, former director general of Celsius Network Ltd., arrived at the court in New York, in the United States, Thursday, May 8, 2025.
Yuki Iwamura | Bloomberg | Getty images
Alexander Mashinsky, the former CEO of Celsius Network, was sentenced to 12 years in prison Thursday after pleading guilty to two fraud leaders, a spectacular fall for the head of a company once praised as the “bank” of the cryptographic industry.
Standing before the American district judge John G. Koeltl in the southern Manhattan district, Mashinsky has faced the consequences of what prosecutors have described as a scanning program to defraud investors.
In December, he pleaded guilty to the fraud of raw materials and a plan to manipulate the Celsius token.
His conviction took place in the hearing room 14A in 500 Pearl Street – a place that saw several Crypto executives who have become fellons.
Mashinsky's legal problems began in 2023 when arrested for titles, basic products and wire fraud, just as Celsius reached a $ 4.7 billion Rules with the Federal Trade Commission – one of the most important in the history of the FTC.
The regulations, which remain subject to Celsius referring what remains of the assets of customers in the bankruptcy procedure, underlined the extent of the fraud.
Prosecutors accused Mashinsky of deceiving investors on the security and profitability of the Celsius yielding platform while secretly selling tens of millions of dollars in personal assets.
Although he initially denied the reprehensible acts, his guilty plea and the conviction of Thursday mark the last chapter in a case of several years which also drawn accusations of the Securities and Exchange Commission and the Commodity Futures Trading Commission, which accused Celli and Mashinsky of orchestrating a fraud program of several billion dollars.
The fall of Mashinsky reflects the fate of other formerly dominant cryptography leaders such as the founder of FTX Sam Bankman Fried, Changpeng Zhao de Binance and Do Kwon of Terraform Labs.
Combination showing the former CEO of the FTX, Sam Bankman Fried (L) and Zhao Changpeng (R), founder and chief executive of Binance.
Mike Segar | Reuters | Benjamin Girette | Bloomberg | Getty images
Ftx
Bankman Fried was sentenced to 25 years in prison in March 2024 for the fraud and the massive conspiracy which condemned his cryptocurrency exchange and a related cover fund, Alameda Research.
Once celebrated as an crypto screening, Freed Bankman was exposed to divert billions of dollars from customer funds to support his own negotiation company, Alameda Research, and for having experienced an extravagant lifestyle in Hong Kong and later in the Bahamas.
Caroline Ellison, who directed Alameda Research and was romantically involved with Bankman Freed, underwent a much lighter sentence of two years. Its cooperation with prosecutors has proven to be crucial to disentangle the complex network of fraudulent activities at the FTX, allowing authorities to build a solid file against banking and other executives.
Bankman Fried is appealing his conviction and his sentence.
Ryan Salame, a former high -level lieutenant of the founder of the FTX, Sam Bankman Fried, was sentenced to 90 months, followed by three years of supervised liberation.
The FTX engineering manager Nishad Singh has not obtained any prison sentence and three years of supervised liberation for his role in the fraud of cryptography; And Gary Wang, co-founder and director of technology at FTX, also avoided the prison.
In May 2024, FTX's succession of bankruptcy announced that almost all customers would recover their money – and more.
A judge rejected most of the complaints against celebrities and athletes involved in the promotion of the FTX in advertisements and other platforms on Wednesday.
Stars like Tom Brady, Gisele Bündchen, Kevin O'Leary and Stephen Curry were one of those confronted with a costume brought by a group of FTX investors.
Binance
In November 2023, Zhao, commonly known as “CZ”, concluded an agreement with the United States government to resolve a multi-year investigation into Binance, the greatest exchange of cryptocurrency in the world.
Zhao resigned as CEO in 2023, but retained an important participation in Binance.
In April 2024, the founder of the Binance billionaire was sentenced to four months in prison after pleading guilty of having launched his whitening of crypto. He served his sentence in a low -security federal prison in Lompoc, California.
Under a new leadership, Binance has undergone a strategic pivot, aligning closely with the pro-Crypto position of the Trump administration. CEO Richard Teng described President Donald Trump's second term as a “fantastic reset” for the cryptocurrency industry, noting a considerably improved regulatory environment for the Binance in the United States
Terraform laboratories
The South Korean authorities are looking for the arrest of Do Kwon, co-founder and chief executive officer of Terraform Labs. His business is at the origin of the cryptocurrencies Terrausd and Luna, now glued. South Korean prosecutors now seek to freeze the Bitcoin linked to Kwon.
Woohae cho | Bloomberg | Getty images
Months before Bankman Fried and FTX fraud were exposed, and years before Binance and its founder admit the fault and would be satisfied with the United States for several billion dollars, Kwon was largely considered to be the best villain of crypto to dismantle his sector with his stable failure.
It was in May 2022 and Kwon rose high. His company, Terraform Labs, was behind one of the most popular stables with Us Peged on the planet, the company's financing had come, its parts (nicknamed Terra and Luna) were collectively tens of billions of dollars, and as the banking, Kwon had done won a place On the prestigious List of Forbes 30 Under 30.
And then everything crashed.
While most floors are saved by a cash mixture and other assets to correspond to the value of the tokens in circulation, the invention of Kwon was rather supported by a complex set of code. When the algorithm failed in May 2022, it cost investors 40 billion dollars of market value overnight, resulted in devastating losses for several investors and contributed to the collapse of the hedge fund with three capital arrows in June 2022, followed by cryptographic lenders travel digital, then from Blockfi And, in a whirlwind, FTX too.
The implosion of Stablecoin has also shook confidence in the sector and accelerated the slide of the cryptocurrencies already underway within the framework of a broader withdrawal of the risk.
Last June, a judge signed on Do Kwon and his bankruptcy Terraform Labs Setling With the US Securities and Exchange Commission for $ 4.5 billion.
Kwon has been extradited to Montenegro to the United States to face Fraud accusations in January 2025.
Ex-Crypto tycoons awaiting judgment
The fall of the Hedge Fund of Crypto three capital arrows and the lenders travel digital and Celsius can all be attributed to the collapse of the Kwon Stablecoin project.
When 3ac lenders Asked part of their money back in a flood of margin calls, the money was not there. Many counterparts of the company have not been able to respond to the requests of their investors, including retail holders who had been promised by 20%.
The three companies all went bankrupt and are currently at different stages of the rule their debts, Celsius having just left bankruptcy in January.
The 3ac co-founder Kyle Davies said he's not sorry for the collapse of his fund, and has so far succeeded in avoiding a prison sentence Bouncing in the worldUnlike his co-founder, Su Zhu, who has served time in a Singaporean prison.
