Prosecutors said Alexander Massky misled customers about Celsius’s own crypto token and artificially inflated its value.
The founder and former CEO of the bankrupt cryptocurrency lender Celsius Network has been sentenced to 12 years in prison for fraud, the Department of Justice (DOJ) said on May 8.
Alexander Masski, 59, of New York, was sentenced May 8 by US District Judge John G. Kortle after pleading guilty to merchandise and securities fraud in December 2024.
Prosecutors said Machineski misunderstood customers about Celsius’s own crypto token cells and artificially inflated its value by purchasing them in the open market. This operation allowed him to earn around $48 million from sales in his own cell.
US lawyer Jay Clayton said Machineski had promised retail investors that the investors were safe in Celsius and that they actually used those funds on high-risk bets.
Machine Skis sells tens of millions of them their cell tokens as “losing billions of customers,” Clayton added.
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“American investors are worth better,” Clayton said in a statement. “It’s strong when it comes to tokenization and digital assets use, but not a license to deceive.”
Machineski’s lawyer could not immediately comment.
Celsius was a global cryptocurrency platform that provided investment returns for asset deposits, protected loans and custody services. The company filed for Chapter 11 bankruptcy in July 2022.
At the verdict hearing, US lawyer Aide Allison Nichols said he cast Machineski as a financial predator and deceived clients from the start by overstateing Celsius’ ability to build momentum.
“He preyed on hope,” Nichols told the judge, saying that clients will not be made entirely financially, regardless of the money that could be recovered through bankruptcy proceedings.
The defense denounced the collapse of Celsius in the “tumultuous slump” of cryptocurrency markets in May and June 2022, saying in court documents that Maski’s actions were “never predatory, exploitative, or venal.”
According to a statement from DOJ, Maskie is said to have deceived customers about Celsius’ financial condition and secretly withdrawn $8 million worth of non-cell assets from the company before it collapsed.
Hundreds of thousands of Celsius users were left without access to around $4.7 billion in digital assets when they finally announced they would halt customer withdrawals in June 2022.
Cameron Cruz, who served on the victims’ committee, has been sentenced to a “severe” sentence. Crews said at the sentencing hearing that hundreds of victims had died before they could serve justice.
The Associated Press contributed to this report.
