Investors have demanded the maximum sentence for Alex Mashinsky, the creator of the collapsed crypto lender Celsius Network.
He will be sentenced on May 8 after pleading guilty to fraud charges in the company’s collapse. Over 200 victim statements were provided to the court in the past week by federal prosecutors.
Their statements presented a bleak picture. Those victimized cut across all walks of life, a mail carrier in Australia, a banker in Copenhagen, and a stuntman in New York.
Although some requested leniency, the majority insisted on the maximum sentence. Some called for the judge to sentence Mashinsky to life in prison.
Brandon Lawrence, who lost 1.5 Bitcoins, added in his complaint, “I am left with a huge amount of shame and debt. He ruined many lives and should be held accountable like Bernie Madoff.”
Celsius promised returns but collapsed in 2022 after the market crisis and the collapse of TerraUSD. It locked investors out of their funds.
Mashinsky, prosecutors assert, misled the public regarding the stability of the platform, including holding optimistic Q&As entitled “Ask Mashinsky Anything” when the crisis arose.
Additionally, the downfall struck severely. One of the retired teachers, Stephen Levenberg, explained that he sold his condo and invested the funds in Celsius.
He and his wife lost almost $400,000, funds that were earmarked for retirement. “What followed were some very dark days,” he wrote.
Celsius scammer Mashinsky pleads guilty
However, while Levenberg feels that a three-year sentence is adequate if victims get repaid, others disagree. Actor Cheyenne Adamson, who was swindled of $150,000, wrote, “Throw the book at this desperate, scumbag crypto scammer.”
Mashinsky, 59, pleaded guilty to two fraud charges in December and consented to forfeit $48 million. The charges could result in 30 years in prison.
Lawyers for the defendant say he should get no more than 366 days. Probation authorities say 15 years. US District Judge John Koeltl will make the final decision.
The case of US v. Mashinsky reveals escalating tension in crypto enforcement. While there have been high-profile pardons for others convicted of crypto-related crimes in the past, such as Silk Road founder Ross Ulbricht and the BitMEX founders, no reprieve has been extended to Mashinsky.
Nonetheless, the sentencing will be a significant moment in the aftermath of the 2022 crypto disaster. The public now waits to determine whether justice will be commensurate with the devastation.
