Ex-Celsius CEO Alex Mashinsky moves to overturn 12-year sentence

Alex Mashinsky is asking a federal court to throw out the 144-month prison sentence handed to him following the collapse of crypto lending platform Celsius Network, filing a motion to vacate that challenges the integrity of the sentencing process rather than the underlying fraud conviction.

The former CEO of the bankrupt exchange pleaded guilty to commodities fraud and securities fraud before receiving his 12-year sentence. His legal challenge revolves around ‘ineffective counsel’ and what his filing describes as “fruit of the poisonous tree,” a legal doctrine that refers to evidence obtained through authorities’ misconduct.

Mashinsky addressed his legal representation directly in the filing. “I did not discharge my counsel at this time but they stopped communication with me so I had no choice but to file my reply directly with the court,” he said.

The motion does not attempt to reopen the fraud case. Instead, it takes aim at how the sentencing was conducted, arguing the court relied on flawed evidence and legal errors when determining key factors including how losses were calculated and how responsibility for the scale of harm tied to Celsius’s collapse was assigned.

Federal prosecutors had argued at sentencing that Mashinsky misled customers about the safety of Celsius while the platform was taking risks it never properly disclosed. Authorities also pointed to alleged manipulation of the company’s native CEL token, contending that trading activity was used to inflate its price in ways that benefited insiders.

Celsius marketed itself as a safe yield-generating platform before it collapsed, wiping out customer funds in one of the most high-profile failures the digital asset lending sector has seen. Mashinsky founded the company and later stepped down as it unravelled.

His legal team has asked the court to vacate the sentence or grant post-judgment relief. Celsius filed for bankruptcy in 2022, freezing all customer withdrawals after a massive crypto market downturn triggered a severe liquidity crisis.