NEW YORK — The founder and former CEO of the failed cryptocurrency lending platform Celsius Network should face 20 years behind bars for lying and self-dealing that cost customers billions of dollars in losses, prosecutors told a judge Tuesday.
Alexander Mashinsky, 59, told thousands of customers that their money was safe and secure, leading to investors pouring over $20 billion into Celsius by 2021, they wrote in a submission ahead of a scheduled May 8 sentencing in Manhattan federal court.
“They were not,” prosecutors said, noting that Celsius declared bankruptcy in 2022 and acknowledged that it could not return to customers what they had invested.
Prosecutors said Mashinsky fabricated Celsius’ profitability and put customers’ funds at the mercy of uncollateralized loans and undisclosed market bets. Meanwhile the company advertised itself as a modern-day bank where people could deposit crypto assets safely and earn interest.
“Mashinsky’s conduct made him rich,” they wrote.
In their own submission to the judge, defense lawyers said their client should face no more than a year and a day in prison after pleading guilty in December to federal fraud charges. In doing so he admitted to misleading customers between 2018 and 2022.
The defense blamed the collapse of Celsius on a “cataclysmic dow