In a sentencing memorandum filed April 28, the U.S. Attorney’s Office for the Southern District of New York, Jay Clayton, accused Mashinsky of leading a “years long campaign of lies” to promote Celsius as a safe investment while secretly diverting customer funds into high-risk ventures and manipulating the price of the platform’s CEL token.

Mashinsky, 59, pleaded guilty in December 2024 to wire fraud and market manipulation charges. Prosecutors allege Mashinsky falsely assured investors their deposits were secure, even as Celsius funneled billions into uncollateralized loans and speculative trades. He also directed employees to artificially inflate CEL’s value using customer assets, enabling him to sell $48 million of his holdings at “artificial prices,” the court documents state.

The collapse of Celsius in July 2022 froze $4.7 billion in customer funds, devastating retail investors. Victim statements cited in the filing describe lost life savings, foreclosed homes, and severe mental health crises. While some funds were recovered in bankruptcy, prosecutors estimate victims remain short over $1 billion.

In the sentencing memorandum, Mashinsky has shown a “profound lack of remorse,” prosecutors argued, blaming external factors and downplaying his role despite pleading guilty. They likened his conduct to other crypto fraud cases, including FTX founder Sam Bankman-Fried’s (SBF) 25-year sentence.

U.S. District Judge John G. Koeltl will determine Mashinsky’s sentence on May 8. The charges carry a statutory maximum of 30 years.

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